Upfront I will advise this administration to steer far clear of any so-called petroleum sector “deregulation” come January 2022. The sentiment is tinder-dry, and I doubt they want another #EndSARS-scale demonstration, or worse, on their hands.I mean, it takes a lot of nerve to meet the petrol price at N97, take it first to N145 naira, then N162, and then propose to leave it at N380 or more. The first increase was done without apologies or care, as the President was merely riding on his fabled and now demystified the “Mai-Gaskiya” factor. Since the government came in 2015, what Nigerians have seen has been different. No matter what anyone says about that era, the majority of voters expressed hope in the Buhari-Osinbajo ticket, and part of that hope was that the economy would be fixed, while life would be easier for most Nigerians in terms of improved standards of living. Alas, what Nigerians paid for has been totally different from what has been delivered. And so, through a lot of disdain, refusal to interact with the people, talk downs such as Nigerian youths being lazy or agreeing with David Cameron, then Prime Minister of the United Kingdom, that Nigerians were fantastically corrupt, the fuel price was increased, twice, to almost double what it was pre-2015. Before EndSARS, perhaps the worst nationwide riot in recent times was in January 2012, due to the tentative increase in fuel prices from N65 to N140 per litre in the name of deregulation. Then the government-backed down to N97. Nigerians would later find out that a few connected smart Alecs had swindled the country of N2.53 trillion in false subsidy claims. Some, like me, needed to know that that level of fraud did happen in this country. But not much has happened to those guys. They are still among us – rehabilitated big boys and girls.
On each occasion when petroleum prices were increased, the Buhari government claimed to have deregulated. Even the Jonathan government claimed to have deregulated in 2012. It wasn’t until later (in 2018) that the issue of subsidies crept back in again. This time, it was christened “under-recovery.” Of course, in spite of claiming to have “deregulated” the market, the national oil company, NNPC, remains the sole importer, and as I type this, the corporation says it has spent an excess of at least N1.6 trillion as at November 2021 (under-recovery), supplying just premium motor spirit (petrol) to Nigerians, compared to the amount it was able to get back from Nigerians. Why? They say the set price of N162 is way too low. So, we are back to the deregulation debate. The government has collapsed the Petroleum Equalization Fund (PEF) and the Petroleum Product Price Regulation Agency (PPPRA) into new regulatory entities, but in reality, we haven’t seen how that market would be fully and truly deregulated, or how the government hopes to manage the blowback of real deregulation – away from the usual deluded meetings they have in air-conditioned boardrooms. Is whatever is left of the PPPRA in the new entity still going to exercise any price control? Why did the government retain an agency that purports to control prices yet lied to the people that it had deregulated twice since 2015 and wanted to deregulate “again” in January 2022? Why should Nigerians trust this administration for anything at all? Is whatever is left of PEF in the new entity still interested in “equalizing” petrol prices all over the country “because we are one, the indivisible nation”? Is that how deregulated markets work? Or has the government shown Nigerians that it is ready for a market where the price of petrol in Victoria Island is higher than in Okekoto Agege, maybe because posh people live and work in VI and can pay more, and the price in Argungu or Jimeta may be significantly higher than in Port Harcourt because of the cost of logistics? Are we ready to liberalize importation from Maradi and elsewhere and allow people to sell at any price they want or that balance their books and turn them a good profit? Are we ready to rein in the oligopolies that will likely skin Nigerians alive in that sector with price-fixing, price gouging, blackmail, fraud, and what have you? A key player once told me, one-on-one, that there were no saints in their business.
I am not certain that we are ready, simply because primordial thinking about these issues is too ingrained in the minds of our leaders. I am not talking about Buhari alone. He has to convince state governors, traditional and religious leaders, and other so-called stakeholders to make them see what real deregulation is about. The first step of that process has not even been taken at all. In fact, we hear that the El-Rufai committee, set up to look into this issue, is proposing a price of N380, and it looks like that will be the landing point in January if this government is crazy enough to stick a fist in the mouth of Nigerians. The Minister of Finance, Hajia Zainab Ahmed, has proposed some palliatives, which turned out to be more expensive than the so-called subsidies, made no sense and show just how desperate the government is. The issue is not palliatives. We have been seeing palliatives since at least the time of the Petroleum Trust Fund, headed by no less than Buhari in the mid-1990s. For me, it is either the government deregulates or not. The palliatives are an avenue for massive fraud. But all that considered, this government should please not go near this project. The government has since spent whatever goodwill it brought in the first year of its advent. It should just ride out whatever time is left with Nigerians. Let it be another government’s liability to wrestle with the issue of deregulation of fuel prices, as desirable as it may be.
Indeed, what we are subsidizing is not the price of petroleum, but the fraud that permeates the entire ecosystem around fuel imports. A very tight confederacy exists around that sector, and no matter what the government has done, no one has been able to beat those guys. The opacity in the sector also stems from the fact that the market is international. What should provide transparency (international markets) also harbors the very elements of darkness that envelop that market. Which Nigerian will be able to interrogate the process of prospecting, exploration, production, storage, transportation, export, sale, import, and purchase of the products involved in that sector? Even successive presidents in Nigeria have learnt to sit and wait for whatever that corporation gracefully hands over to them, whether they appoint themselves minister of petroleum, or not. In spite of recent reforms, it will be awfully arduous to wrestle with such ingrained and perennial power, as those with power never wish to relinquish it. Therefore, beyond the several funny calculations that lead us into deficits running into trillions, what we suffer is the massive and mindless corruption in that sector, which could be confirmed by the sabotage of all our refineries. We could add to that the failure of our education to teach us anything tangible, or perhaps more aptly, our refusal to use our vaunted education to solve problems that matter. That is why we haven’t built anything in 72 years of higher education in this country that can help us refine petroleum. The last time I checked, Nigeria imports at least $12 billion worth of refined petroleum products yearly, while we are entitled to merely 35% of the $45 billion exported in crude oil yearly ($15 billion). What we import almost cancels out what we gain from exports. And this is before the huge administrative and operational expenses from our behemoth petroleum corporation and its many subsidiaries kick in. The fault is indeed in our stars.
The issues facing the Buhari-Osinbajo government are not limited to the petroleum sector and the upcoming deregulation. I viewed every other sector, and everywhere looked covered in crimson. If this government were a child, it would have been a very dull one—the type that gives its parents pangs of disappointment and apprehension for the future. The government would like to claim some successes in infrastructure building, though. The Chinese have helped us somewhat with the rail sector, with some nice airports (some kudos to Rotimi Amaechi) and I understand Minister Fashola will be opening some roads in the next year. Yet, Nigeria could not be called an infrastructure-sufficient nation. It’s just that our standards have dropped, and the bar has been totally lowered. Most of our villages remain from the 17th century when the earliest European adventurers met them. Our children are still out of school en masse as we waste their precious minds, and I have seen some so-called enlightened leaders even justify that situation, choosing to blame it on colonialists. We thank God for our physiological composition and adaptation over time; otherwise, we should have been sicker than people in “developed” economies. No matter how hard our interpreters tried, COVID-19 did not wreak the foretold and expected havoc.
But as fair as I tried to be, everything else looks woeful for this government, and I wonder where the miracles will come from, that the Buhari-Osinbajo regime will not be declared – officially and on the streets-as the worst government this country has ever seen. Add to this the attempt to leave fuel prices at N380, with prospects of reaching N500 or N600 once we have been left to the mercy of oligarchs, the fact that this government met the Naira officially exchanging at N199 to the US Dollar and has now devalued it to at least 410, while on the streets, what exchanged for N220 is now N570, and you begin to see the meaning of a calamitous disaster. I have consistently called this government a Buhari-Osinbajo administration because I now see that, indeed, Osinbajo is serious about coming in as president in 2023. It will be a natural transition for someone who has been part of the government for 8 years and within the same party. The idea will be to not upset the applecart at all. And indeed, Osinbajo is smart, savvy, hardworking, eloquent, fit, and very intelligent. But he can not extricate himself from the calamity on the ground. More so, per the constitution, the economy is under the Vice President, and he has had some good parts to play in how the economy has turned out. The two major devaluations that have occurred since 2016 – from N199 to N306 and then to N360 – occurred under his supervision and with his approval. Buhari was then busy repeating how he was never going to devalue the currency when he had absolutely no plan for what to do. Osinbajo has also been repeating the idea that the Naira should be floated. The Naira could only float in one direction for as long as the eyes could see – down. Add his flair and a soft spot for arcane economics like cryptocurrencies and the blinding success of fintechs and “investments,” and I’m afraid he may be playing a huge gamble if he comes in. I will write him another missive on this, seeking assurances. His economics are way too far to the right for the good of this country.
So, the Naira has tanked under this government and may tank some more. A nightmare scenario begins to unfold. What are the other indices by which economic performance may be measured? Inflation Yes, a growing economy will suffer from inflation, but the Nigerian economy has not grown since 2015. It’s been tales of woe, first due to a downturn in crude prices in 2016, and then COVID-19 in 2020. The spikes in crude oil prices in between have been liabilities to us. The higher crude oil prices, the higher PMS prices, and subsidies, and then riots or worse. The lower the crude oil prices, the more we have to devalue the naira and take loans we do not intend to pay back. More on debts shortly. But I priced a bag of Olam rice today (produced locally) and was told it was N26,500! Another one that looked imported (as it was written in Thai something or other) was priced at N28,500! We were complaining about N8,000 rice under Goodluck Jonathan. We have seen at least a 250% increase in the price of staples under this government. I recently went into a cornershop and bought a fairly large tin of Milo for N10,000! That is 60% of the minimum wage! Cooking gas has climbed from N3,000 to N9,000. Cement is closing in on N5,000. Even garri and beans are way up through the roof. And salaries have stagnated everywhere. Even those of us who do business have been unable to keep jerking up prices and fees arbitrarily in this fashion. I sometimes feel like something is eroding the very ground upon which I stand, closing in on my poor self, even though I know that the best opportunities are here in Nigeria. Things could be so much better if this government had not turned out the way it has. I also feel like something happened to Buhari that fundamentally allowed his alter-ego to kick in, like someone who suffers from a dual personality crisis. Not long after he was sworn in in 2015, the man changed against the people. A man who walked among the people simply stopped, showing that he held the people in disdain and was only happy among his fellow politicians, with whom he backslashed. When asked about his promises to the people in the couple of interviews that he granted, he scowled, grimaced, glowered and asked with dripping unconcern and disdain, “Did I cause the problem?”. I was beyond crestfallen. I knew less than six months into that government that it would bear ugly fruits and decided that we should organize ourselves around new political parties.
Debt. foreign and domestic. This is another frightening reality that deserves its own separate analysis. Well, if we were to admit it, the Buhari-Osinbajo government has unfortunately combined bad luck with incompetence. The government will want us to believe that it has no choice but to borrow. Since the advent of COVID, yes. Every country, including the richest, is borrowing to claw its way out of an unprecedented crisis that has resulted in the near-permanent shutdown of at least a portion of every economy. But there are two issues. I recall that pre-COVID-19, Kemi Adeosun not only borrowed massively, she actively courted foreign loans, ignoring the obvious problem presented by exchange risks. We complained then too, and I wrote a number of articles about it. However, recently, we have consolidated on these foreign loans, whose liabilities even became larger as we devalued the currency. The liability (in naira) will be even larger as we continue to devalue. I think that the reason why we borrow revolves around our innate laziness (which manifests in the mental block that we are helpless and must go begging) and the unwillingness of people in government to do the right thing. Most people who have ascended to office at our national level seem to genuflect to their counterparts abroad and display some level of inferiority which translates to this “begging billionaire” syndrome. Our leaders cannot go after the principalities and powers to pay more taxes. No one is even ready to better organize society to earn more for the government by way of fees, levies, duties, fines, charges, rents, and what have you. And so, all the proposals for increases in sin taxes, excise duties, luxury taxes, property taxes, capital gains taxes, inheritance taxes, and what have you, have come to naught. We chose, very much under this administration, to mortgage the future of our unborn generations to come and be beggars in perpetuity to their mates abroad.
This is not to give a pass mark to former governments in Nigeria. I don’t do mediocrity. I also know how tough governance can be, but it must be said that this government fell under the weight of its own ignorant arrogance. Indeed, other governments have even tried to collaborate with others in forging some degree of unity through politics. Obasanjo coopted the Ume-Ezeokes, the Bola Iges, the Mahmuds, and Yar’Adua coopted many from the opposition. Ditto, Jonathan. But these ones came and thought they were superstars. The government will need a major miracle to heal the cancers it has caused in the Nigerian body polity. I haven’t even spoken about the total failures in security, in education, in the health sector, in the housing sector, in the environmental sector, and indeed anywhere that matters. For now, my conclusion is that anyone that has been closely associated with this administration should not dare to step out for the 2023 elections. It will be a mockery of the Nigerian people. 2015–2022 will be a period best written off for most Nigerians. How then do we ensure we don’t get it so, so wrong in 2023? frightening indeed. But we will outlive this one also. For the sake of the economy and our own very lives, we cannot afford to get it wrong.