The list of obnoxious subsidies crippling the Nigerian economy is endless: welcome packages, severance packages, housing allowances, transport allowances, medical benefits, executive fleets, endless convoys, security votes, forex allocations, estacodes and life-long entitlements for public officers who served only a few years…
The difference between lawful allowances and corrupt appropriation of public funds is blurred in Nigeria by greed and conspiracy. Public office holders conspire to pay themselves much more than their lawful benefits by cooking the books and exploiting loopholes in the system. Since the gatekeepers are involved, no one is held accountable. A Mafia code of silence protects all beneficiaries.
The sums budgeted annually to run the National Assembly, the Presidential Villa and their equivalents in the states can run several economies around Africa. These are the real subsidies holding down public finance in Nigeria. Not the pseudo-subsidy on petroleum products that end up in the private pockets of the same people now preaching the Gospel of Subsidy Removal.
A video is currently trending shows a young Sierra Leonian woman on the streets, walking to work alongside the Dutch Prime Minister. No convoys. No aides. No overzealous security details. In a genuine republic, leaders live within the same socioeconomic bandwidth as the led. It keeps their feet on the ground. It helps them know where the shoe pinches and focus on finding solutions.
All over Europe, prime ministers and presidents earn significantly below what top executives in the private sector earn. In Nigeria, it is the exact opposite. Public office holders pay themselves to live like kings (in and out of office) over an impoverished country. It’s a mismatch. It’s immoral.
Remove these real subsidies which finance opulence at public expense; pay public office holders on a similar scale as civil servants (no slush funds and hidden allowances); let fuel (and other petroleum products) find their prices according to forces of demand and supply. The Nigerian economy will find a healthy natural balance. For now, we are robbing the people to pay politicians..
Organized Labor must not fall into the trap of thinking that if it negotiates a major pay rise, then all is well. Even if government manages to pay, how about the private sector? Especially micro, small and medium scale enterprises which employ the bulk of the workforce. They will now be saddled with significantly higher operating costs amidst collapsed demand and struggling revenues. Not to mention that inflation (or stagflation) will quickly wipe out any imaginary gains of a pay rise.
So, one pre-condition for talks on “subsidy removal” should be to insist on a drastic and verifiable reduction in the cost of governance. In the new dispensation, no serving government official should be allowed to travel abroad for medicals or train their children in foreign schools. These measures will serve to eliminate the gap between the reward systems for public office holders and other sectors of the economy. They will also ensure that public policy is well reasoned and has a uniform impact on all segments of society.
Expectedly, the fat rats in government will resist this by all means. But Labor and the rest of Nigeria must stand their ground. Those who are not prepared to serve Nigeria while living like Nigerians should stay away from public office. They can finance their own lavish lifestyles from private enterprises and pockets. Public office is for public service, not for self enrichment at the expense of the public.
The petrol subsidy removal saga is proof that politicians have decided to throw the people under the bus in order to have more money to fund their profligate lifestyles which are now somewhat threatened by an empty treasury.
In truth, it cannot cost more than N150 – N200 to obtain a liter of petrol refined from Nigerian crude in a Nigerian refinery within Nigeria today. That estimate includes a decent profit margin for all players in the value chain. To ship the same crude abroad for refining and ship it back on the excuse that Nigeria’s refineries are not working is to subsidize inefficiency, subvent incompetence and reward corruption.
All other refineries built around the world at about the same time as the Warri, Port Harcourt and Kaduna refineries are still operating in good order. To ignore this fundamental truth and be debating a fictional subsidy or a fuel tax in disguise is a symptom of the inherent insincerity and shallowness that rules the Nigerian state.
After eight years of mindlessly chasing revenues and failing to build a healthy, organic economy, the Buhari Administration has run Nigeria aground. Half of Nigeria’s daily oil output is stolen at source. Many businesses have folded up. People are poorer. Without businesses and people to pay taxes, government revenues are sliding. Government is borrowing to pay recurrent expenses. Lenders are no longer willing. So, government is using “Ways & Means.” That’s a secret code for printing unearned money to pay its bills! If Nigeria was a private enterprise, it would have closed shop a long time ago. We’ve never had it so bad in the name of leadership.
Victor Anazonwu, an author and communication expert, writes from Lagos.
