In Nigeria – A Leadership That Consumes Citizens by Ola Animashaun

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The Buhari administration came to power in May 2015. Before the 2015 general elections, Buhari had contested the presidency three times, before being fourth time lucky. Buhari had also been a military head of state and before then, a military governor and a petroleum minister. With all these in mind, one should be lenient with those who thought Buhari would have enough, if not all the answers to Nigeria’s problems. One should also be lenient with those who thought that Buhari, having secured the presidency on his fourth attempt would be more than ready to hit the ground running and tackle the country’s problems head on.

One of the glaring problems of Nigeria was the importation of refined petroleum products due to the absence of local capacity to refine crude oil which Nigeria has in abundance. Nigeria has four redundant refineries that keep guzzling both personnel and turn-around maintenance costs in billions of naira without refining crude oil to necessary products. Attendant with the total importation of refined petroleum products was a subsidy regime that had become fraught with corruption in the guises of over-payments, wrong payments and diversion of imported refined products across the borders for profiteering.

Buhari was well aware of these problems and had many years to have come up with solutions and policies to address them. He however started on a false note. While campaigning for his fourth contest, he recklessly and dishonestly said there was no subsidy being paid by government and that the whole subsidy regime was a fraud as the then government, according to him, was not subsidising anything. A while after assuming the mantle of leadership, he informed Nigerians that his government was paying subsidy.

Be that as it may, a serious government should have, from the beginning, set up a time frame within which it would end the subsidy regime, and within that time frame, has implementable plans towards giving Nigerians the comparative advantage of being citizens of a crude oil producing country.

Let’s say that there should have been a two or three-year plan, starting from 2015. Within that time frame, the government would have come up with a policy to sell the refineries to private business entities. While doing this, it would have been simultaneously granting licenses for building private refineries. The agreement concerning those licenses would be strong enough to give investors adequate guarantees (including strong and clear arbitration clauses for damages) that government would not interfere in the business of the investors when the refineries to be built become going concerns.

There would have been little or no agitation from those employed by government to run the redundant refineries if they are carried along and provisions made for them, either in the form of attractive redundancy payments, assimilation into other government departments or possibilities of employment in the privatised refineries or the new ones to be built by investors. Planning this well and implementing it successfully would have been a win-win situation for all concerned.

To the citizens, they would have had adequate notice that somewhere down the road, the subsidy regime would end. They would equally be comforted by the fact that government was taking steps to stop importing refined products by having refineries at home, thus returning the comparative advantage they should be enjoying as citizens of a crude oil producing country. The existence of working refineries in the country would also create numerous job opportunities.

Removing subsidies when consumption is totally dependent on importation (and consequently on the vagaries of the oil market) due to government’s ineptitude is almost tantamount to wickedness and insensitivity on the part of government. Nigerians are being made to pay for government’s incompetence. We are being made to suffer for money borrowed by government and spent by government on itself and very few Nigerians. Nigeria’s fiscal policy has been hijacked by the IMF and World Bank because the government wants to borrow more money.

I’m not unaware of the refinery being built in Lagos by the Dangote group. That however would not be an adequate solution to the problem at hand. It will only create an oligopoly in that the Dangote group would be the only major player, dictating prices just like MTN and ECONET did at the inception of liberalisation of mobile telecommunications. I must however note here that the subsidy regime had to end, it is just the way and manner the government fumbled and wobbled towards it that has further impoverished Nigerians.

(C) Ola Animashaun, 2020

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