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Subsidy: Teachable Moments -

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January 18, 2012 /  Engagements By Chidi Amuta. Email & Tel:chidi.amuta@thisdaylive.com. 08056504733 (SMS only)

 

What began as an audacious error of political judgment and economic desperation quickly graduated into a landmark national upheaval. It threatened to swallow the little democratic gains that have been made in this imperfect republic. It afflicted the ruling political elite with avoidable insomnia. The fuel subsidy crisis that ended yesterday was a disruption foretold but clearly avoidable.  It was foretold because, either way, a removal of subsidy on petroleum prices was bound to dislodge honest private budgets and unsettle public peace.

 

It was avoidable if the government of the day had done a bit of thinking and strategising on how to communicate the bad news, how to manage the crash in public expectations and, most importantly, how to find and punish the bad guys responsible for the subsidy debacle.  Because these were not done, a headache became a tumour and a crisis that should have been dissipated in less than 48 hours lingered for more than a week and almost graduated into a political tragedy.

 

A few things remain hard to understand.  The most important is this: That a government that is very thin on popularity and transparency and faced with a terrorist insurgency that it hardly understands should add petrol subsidy palaver to its smouldering baggage is one of the mysteries of recent Nigerian political adventurism. But it happened and now is happily over, thereby once again underlining our curious exceptionalism.  Our exceptionalism as a nation lies in the fact that crises that destroy other nations and plunge them into endless wars find resolution in Nigeria somehow and instead strengthens our corporate cohesion and longevity.

 

The immediate dangers of the subsidy shut down and street protests may have been averted or postponed. We may have escorted the wobbly Goodluck Jonathan government through a very difficult policy threshold. Acting in concert, the National Assembly, the Governors Forum and organised labour may have succeeded in saving Jonathan from the fate of all incompetent leaders. But perceptive Nigerians have cause to be afraid. Really afraid.

 

The source of worry is something more fundamental. The quality and mechanism of decision-making and crisis management of the Jonathan administration is tragic.  Take the subsidy matter alone and forget past bungling.  The timing of the price increase in the aftermath of a Christmas marred by an unfortunate bomb blast is unfortunate. The choice of January, a time when most people are stone broke after the expenses of the end of the year and are eager to return to work in the midst of school fees and other beginning of the year costs is even more questionable. And that was coming from a president that campaigned on the emotional point that he grew up in humble circumstances. That alone left the public no other conclusion than that government lacks compassion. 

 

Even after the subsidy increase had been introduced, engagement of labour and other stakeholders was handled with casual insensitivity and medieval cruelty. Not even the National Assembly was taken into confidence while less than 30 per cent of the ministers knew anything about the timing of the price increases, hence they were reluctant to defend a policy they knew little about. Even military autocrats act in the context of some kind of consensus. Absolute monarchs act in a manner that endears them to their subjects!

 

Similarly, the measures that ought to have been in place ahead of the price hike announcement were only introduced in panic response to pressure from an angry public. A nice speech with the theme: ‘I feel Your Pain’ was wasted because it came after the poison had been dispensed.  There were other desperate measures: The launch of a miserable 1,600 buses acquired without due process to assist 160 million Nigerians, a foolish announcement that public sector salaries would now be paid on the 20th of every month!  A closer look at the searing KPMG audit of the NNPC, EFCC intervention and investigation of the subsidy recipients to determine where all that money went as well as the publicisation of the SURE document. All these measures should have preceded the subsidy removal announcement.

 

In fact, the first draft of the SURE document was smuggled to the media as an anonymous and homeless document from a fifth column organisation, meaning that even the authors had little or no confidence in the document or its impending PR value. When it became public, the first item to be implemented was the launch of a few miserable buses in the midst of the anger and pain of the fuel price increase. What impudent insult! The conclusion was that the government had hardly sat down to do any thinking on the consequences of a policy move of such grave repercussion.

 

What is even more frightening still is that a government that has spent so much time campaigning about subsidy removal does not seem to have done any home work on what to do with the dividends of subsidy removal.  What we have had is a surfeit of rhetoric and rehash of familiar populist platitudes: mass transit, infrastructure, better health etc. as if these were not supposed to form part of the standard expectations of the people from a government that spends close to 80 per cent of resources running its processes and personnel.

 

The value of the face-off between government and the citizenry over this petrol price is higher than gasoline prices. There have been unintended dividends for which President Jonathan ought to be thankful to labour and civil society groups. While it lasted, the debate shifted from the arithmetic of subsidy removal to larger issues.  Issues of governance quality. Issues of the very preparation of our political leadership for the complex role of national leadership. Issues of the viability of the Nigerian federation. Issues of accountability of those who wield political power and occupy public office to those whose mandate they claim.

 

Any fear that Nigeria was about to disintegrate should by now have disappeared.  The petrol protest united Nigerians across all known divides.  Nigerians fought as one family, united by a common concern with economic survival and quality of life.  Most importantly, Nigerians have woken to the reality that power belongs to them and that those who hold positions of authority do so on behalf of the people and must of necessity remain accountable to the people.

 

The fuel price struggle shifted the critical gaze of Nigerians to how their money is spent and their affairs are managed by those who parade their mandate. Matters of governance and its cost have come to the public sphere. The president should seize this moment to free himself from the gangster cliques that have held him hostage. He should show the clippings of the protest footages from all over the country to his friends and advisers. Those placards contained the wishes of Nigerians. They need to be studied carefully.

 

It is true that the political opposition smuggled their agenda into the protests. That is healthy in a democracy. The misfortune of the government in power is the breeding ground of an opposition that understands politics.  The opposition is not in business to see anything good in Jonathan’s administration. That is how these matters are!

 

Most importantly, I have always insisted that the subsidy removal gambit is actually recourse by government to the imposition of a gasoline tax to balance its books. This is a tax whose incidence falls indiscriminately on all and sundry. To that extent it achieves two unintended consequences: it unites the people across social boundaries. Even the rich who can afford these atrocious fuel prices know that they are unsustainable because their servants cannot come to work while the roads would be unsafe for them to waft those huge SUVS around.

 

Everybody at last feels that government is collecting tax money from their pockets and must show accountability. Now that we all have to pay some of our taxes at the gas station, that is understood as an inconvenience which we have to bear in order to have better roads, hospitals, schools  etc. In other words, the age of taxation without representation is on the way out. Through the gas pumps, we all now see ourselves as contributors to the Nigerian commonwealth and feel entitled to reasonable disclosure of how public money is spent.  This is a critical factor in the entrenchment of public accountability, which is at the foundation of every proper democracy.

 

More interestingly, the level of violence in these protests as a function of the demographic size of the country and the geographic spread of the protests has been small.  There seems to be an inherent maturation of the labour movement, our civil society and the law enforcement apparatus as well.  The right to peaceful protest as a component of a viable democratic culture has been established in this strike and its attendant protests.

 

The government wrestled all of us to the ground. It chose the gas station as the venue for dispossessing us of N32 for every litre of petrol we buy.  In return, we have told them in clear terms how we want to be governed and what they should do with the extra change from our pockets.  Above all, we caused quite some loss of sleep in high places. Not a very bad week after all.



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