Fuel subsidy and the Jonathan's cabal

On January 16, 2012 · In Viewpoint

NOTWITHSTANDING President Goodluck Jonathan's pledge to consult widely in respect of the earlier proposed removal of subsidy on petroleum products, the president and his clique went on the new year day to impose a heavy and unsustainable price on the product, by announcing the withdrawal of the phanton subsidy.
It is a pity that the clique of few persons around the president, desperate for international career has succeeded in manipulating him to accede to a socially and politically risky decision without any discernable economic benefit.
The co-ordinating minister of the economy, who also oversees the finance portfolio, Mrs. Ngozi Okonjo-Iweala is a foremost canvasser for the removal of the subsidy while claiming that money saved from the subsidy would be used to provide other desperately needed services.
The former world bank managing director, seconded to the Nigerian cabinet has taken a particular relish to a seeming intellectual and political invisibility. She is grossly mistaken to assume that when once the politically motivated economic agenda she foists on a naïve and unimaginative regime she manipulates in cahoot with her principals, is announced, Nigerians would be beaten to line to swallow it. She might actually be biting more than she can chew.
During her campaign to remove a hefty sum of over 12 billion US dollars from the country's treasury to pay dubious foreign debt, she made similar claim that funds that would be released from periodic servicing of the debt would be available for other priority areas in the economy.
The press hailed her as economic czar with a magic wand. With hefty pay for all kind of middle men who negotiated debt repayment, Nigeria transferred from her lean treasury nearly 15 billion US dollar at once, something that no other country in the world has done. Since the debt payment, she went back to her principal in Washington, while nothing postive happened to the economy, she and her 'expert' team reformed for more than five years.
Rather, the country and her economy sank deeper in the doldrums. With her return to the President Jonathan cabinet with larger than life and over bloated image, she has set off on another set of similar reforms with a promise of exactly what she promised about five years ago.Parading a thorughly discredited economic paradigm which Washington foisted on the South Americas in the 1980s with severe political backlash to the right-wing regimes that implemented it, Mrs. Okonjo-Iweala walks with a swagger of a goddess. The governments in the region that implemented the anti-people policies , the type that Nigeria is currently wedded to,ranging from Brazil, Argentina, Venezuela to Bolivia, Ecuador, Paraguay, Nicaragua and recently Peru were wiped out in a single electoral swoop. With alternative policies , the successor regimes have tackled successfully economic decline and socio-political exclusion then, with region doing well now on the human social index.
This time, with a thorough show-man at the Central Bank, whose dubious figures would have more electrifying impact in the Nigeria burgeoning movie industry, Nigerians are been treated to another theatre, only this time with a horrifying implication for their very existence. The official argument for the removal of the petroleum subsidy is as irresponsible as it is very fraudulent. key components to the thoroughly misguided argument is that investors would shun investments in the sector unless they are assured of profitable returns, and that therefore government purported subsidy is both distortionary of the market and disincentive to the prospective investors.
The minister of Petroleum resources, Mrs. Madueke, added her mix, claiming that building a refinery is an economic exhausting enterprises that no one would venture into it without assurance of huge returns. Let us assume that Nigeria is just a market, discountenancing the immortal exhortation of former French Leader, Charle De Gualle that the worth of a nation is not essentially in its GDP numbers," why is government so determined to remove the Petroleum subsidy distortion when there are more market-damaging and distorting variables like endemic and rampant corruption in addition to the unsustainable cost of governance. It is strange that the economic czars of Ngozi Okonjo-Iweala, Lamido Sanusi, Deziani Madueke, with the horde of market puritans and ideologues are blind to the acutely distortionary impact of the named variables.
Nigeria oil industry, the most abused in the world, through officially sanctioned sleaze, has produced fat-cats for neither entrepreneual capability nor even modest work ethic. These government and party minted billionaires are actually the domestic drivers of the mindless hike in prices of petroleum products, while the international wing is desperate to maintain Nigeria as a hollow-shelled economy with only a capacity for massive flight of capital. The intermediate clique in government are enforcers whose careers prospective on the international level is guarantee and comfortable material well being assured. It is these vicious and buccanear trinity that Nigerians are pitilessly sandwiched in.
In this circumstances only a robust mass action, co-ordinated by a revolutionary cadre can resist, defeat and unravel the façade of respectability and intellectual invisibility that the clique adorns.
In the practical case of the government new year assault on Nigerians, it has no economic justification and with a social hindsight, the political audacity of the ill-fated decision is bound to have repercussion on its very authors.
Mr. Onunaiju is a journalist based in Abuja.

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