Questions government must answer about subsidy removal

Questions government must answer about subsidy removal

Whether President Bola Tinubu exhibited extraordinary courage speaking about removing subsidy on Premium Motor Spirit otherwise called petrol at his inauguration is debatable.

In raising the debate, we should consider whether Tinubu or any other person elected now has any choice but to end this subsidy regime. The answer is no and for at least two reasons.

The first is that Nigeria is in dire financial straits. Saving the trillions the government claims to spend on subsidies yearly will save us some trouble.

Second, the Petroleum Industry Act of 2021 has already initiated a new legal and governance structure for the oil and gas sector, and payment of subsidies has no place there. In fact, but for the incompetence of the Muhammadu Buhari administration, which suspended the implementation of the Act, Nigeria would, by now, have taken its baby steps and contended with the initial challenges of the policy. But our leaders, taking governance for a joke, are mostly after populism.

Doesn’t this contradict the suggestion that Tinubu did not display unusual courage at Eagle Square? No!

The point is that Tinubu became President when Nigeria had no choice but to do something about this subsidy regime. This is the reason Vice President KashimShettima told the media: “… either we get rid of the subsidy, or the fuel subsidy gets rid of the Nigerian nation….” This decision had to be made, courage or no courage.

While speaking about courage, however, we should also ponder whether courage is just a raw display of ability. I don’t think so, especially concerning leadership and public policy. Accompanying a leader’s audacity must be discretion and compassion for the people. Even more so in a society that requires multi-level changes.

I agree that Tinubu espoused change in that off-the-cuff declaration at Eagle Square. But one person or even a select few cannot change a country. It is a fallacy that democracy won’t accommodate. Enduring change occurs when people buy into and pursue a vision with as much vigour as their leader. The measure of effective leadership is how much success you make in transmitting your vision to others; only then can you achieve change. I suggest that discretion about timing, communication, and compassion for the people are embedded in courage.

One of the most phenomenal stories of the rebirth of nations is Singapore under the leadership of the inimitable Lee Kuan Yew.

Although Yew sometimes tended towards benevolent dictatorship, he made deliberate efforts to raise social consciousness and gain the understanding and support of his people through mass mobilisation. His government’s “greatest asset was the trust and confidence of the people.”

In his book, “From Third World to First World,” he discusses when he wanted to reduce traffic congestion around the capital. He explains: “…I learned that if I wanted to get an important proposal accepted at all levels, I should first float the ideas with my ministers, who will then discuss them with the permanent secretaries and officials. After I got their reactions, I would discuss the proposal with those who had to make it work. If, like the transport system, it concerned large numbers of people, I would get the issue into the media for public discussion. Hence, before we decided on an underground mass rapid transit, we had a public debate for a year ….”

On another occasion, he reckoned that nurturing talents for the country’s future depended on reducing the rate male graduates married “less educated and less intelligent women.”

Yew went on prime-time television to say that these men were stupid, which brought consternation. To douse the tension, he presented a 1980 study conducted in Minnesota, United States, showing that nearly 80 percent of a person’s make-up is from nature and about 20 per cent from nurture. He established a Social Development Unit headed by a lady who exemplified his vision to facilitate the actualisation of the revolution he envisioned. Soon, many of those upset at his “discriminatory” and “disrespectful” position saw the point. The government achieved this through continuous public sensitisation and consensus building. That process of change management, which includes getting the people’s buy-in, is what successive governments need to improve in Nigeria. President Tinubu must resist the temptation to take Nigerians for granted by first taking actions that impact their lives and explaining them later. This is more so because he inherited a considerable trust deficit between the government and the governed, and he must work hard to restore confidence.

Concerning removing subsidies, for instance, there are sound economic arguments to band around. But in convincing the people, we must maintain sight of the socio-political and governance issues involved. This includes the tentative nature of gains made from previous attempts to remove subsidies and the unconvincing results of subsidy removal on diesel, kerosene, and aviation fuel. What did the common man gain from this other than a price increase?

Indeed, the opacity in the oil and gas sector makes the petrol subsidy a corruption haven. There are arguments that Nigeria would do much better subsidising production than consumption. This is even though petrol is a factor of production for many small and medium-scale enterprises in the country. They also say that the masses only have tokenistic benefits from the tonnes of money invested in fuel subsidies. The idea is that rather than fund the indulgences of the rich, who drive multiple cars, conserving the trillions otherwise spent on subsidies and investing in same social services and physical infrastructural development does more for the people.

All of these make good sense, yet the government should make Nigerians understand why they must first undergo the pains of subsidy removal before enjoying the dividends of good governance.

 And it is a fundamental question. When you consider that the most frequent excuses given by successive governments and analysts revolve around massive corruption and the smuggling of petrol to neighbouring countries, you wonder why the government cannot tackle corruption and make its Customs service more efficient. These are basic crimes that are within the purview of a responsible government. How does the government outsource the solution by adopting a decision that hurts the people? Why can’t the government deal with crime?

We can extend this argument to ask how a government that can’t secure its border hopes to wrestle with oil theft or deal with the problem of light weapons and small arms. How is it the people’s lot to bear the pain of the government’s failure to make the refineries work after reportedly spending $25bn on maintenance in the same country where a new refinery was just completed for $18.5bn?

How do you justify fostering economic hardship on the people when government officials throw ostentation in their faces? When politicians live large amid the same people who strive to survive? How is it that in all the years that we have attempted to remove subsidy, successive governments have failed to strengthen the processes and remove some, if not all, of the opacity around governance? It is so bad that the immediate past President went from declaring that there was nothing like subsidy in 2012 to ending up as the leader that spent over N11.75tn on the same phantom! How?

So, as the Tinubu administration commits itself to removing subsidies, it must give cognisance to the rights of Nigerians to know and be treated well in the process. This is not so much about palliatives as it is about ensuring that the government explains its past failures and enunciates specific benefits from this policy. These promises should also be specific, measurable, and time bound so the people can hold the government accountable.

The government must also show its capacity to govern effectively. We must stop giving citizens (who, by electing leaders yield their destinies to the government) the impression that certain crimes defy the government’s capacity. Bring everyone who has cheated the country to book and show that no one is above the law.

Government must also reduce waste and the glitz associated with public office. Above all, there must be more transparency and accountability in public offices. No society governed by the level of arrogant opaqueness in Nigeria will make sustainable progress, subsidy, or no subsidy.