Fuel Price Hike/Subsidy Removal: No Pain, No Gain

“Change comes with pain… But this pain later becomes a gain. To explain it well, “no pain, no gain”! Endure the pain and make a difference!” ― Israelmore Ayivor

Whoever says the pains of joining fuel queues for hours was not as excruciating as the pangs of removing N145 from one’s pocket to pay for a litre of fuel may surely not be from this part of the world. As such, various analysts jumped (and some are still jumping) into the pool of the debate of whether the government was truthful with the removal of subsidy on premium motor spirit (PMS) owing from the fact that this government, while in the opposition seat in 2012, vehemently criticised the then President Goodluck Jonathan’s decision to remove same. Others are of the opinion that the realities on ground now and back in 2012 are not the same.

A key viewpoint put forward by some analysts is that subsidy removal would have made more economic sense when crude oil price was high (as it was in 2012) to save the trillions of naira wasted on payment of subsidy, but due in major part to the lack of trust in the past administration to redirect the gains from subsidy removal to infrastructural development of the country and perhaps also due to the intensity of anti-subsidy removal chants from the then opposition All Progressives Congress (APC), the opposition party colluded with the organised labour and other civil society groups to ambush and frustrate the attempt, forcing the administration to reverse it, and thus leading to a not so natural death for the move.

Vice President Yemi Osinbajo has told Nigerians that the new fuel pricing regime is not about subsidy removal as widely believed, but a foreign exchange problem in the face of dwindling earnings of the country. In his words, “What happened is as follows: our local consumption of fuel is almost entirely imported. The NNPC exchanges crude from its joint venture share to provide about 50 percent of local fuel consumption. The remaining 50 percent is imported by major and independent marketers. These marketers up until three months ago sourced their foreign exchange from the Central Bank of Nigeria (CBN) at the official rate. However, since late last year, independent marketers have brought in little or no fuel because they have been unable to get foreign exchange from the CBN. The CBN simply did not have enough.”

Without prejudice to the Vice President’s honest depiction of the reality that has befallen the nation, to a common man on the street, the description the federal government or its critics decided to give the development, notwithstanding, the biting effects are the same to everyone regardless of their religious, ethnic or political affiliation. Thus, the matter goes beyond trivialisation. This is beyond APC vs PDP or Buhari vs Jonathan, as some imprudent elements have been trying to make it.

The subsidy removal or upward adjustment of PMS pump price (as some has termed it) means low-income and poor Nigerians (about 112 million people) willi mmediately start facing an increase in the price of transportation, raw materials, services and consumer goods. This group of people will feel the pang more because of their unsolicited economic class. This group makes up the quintessential and major part of the productive force of the nation. This disgruntled majority is not only a scare but a threat to the continued existence of the not-so-disgruntled minority. All these and many more realities need no further lurid paintings to attract a spine-shrieking reaction from the government.

Thus, the onus on the Buhari administration will be, among other things, to as a matter of urgency roll out palliatives and dividends accruable from the removal of subsidy (or what the government called partial deregulation of the downstream sector) that have direct bearing on the standards of living of the common man. These palliatives and dividends must go beyond the people reading about them on the pages of newspapers to outrightly feeling their positive impact in every facet of their lives. It is time to have less talk and more action.

Good days ahead

It is worthy of note that a few days after this development, the government rolled out some palliatives expected to cushion the negative effects of the subsidy removal on the populace.

According to the Senior Special Assistant to the Vice President on Media and Publicity, Mr Laolu Akande, the government would be directly impacting the lives of more than eight million Nigerians through the various social investments in the 2016 budget spending that would provide succour and serve as palliatives to ordinary Nigerians. One of the good news, according to him, is that the direct payment of N5,000 monthly to one million extremely poor Nigerians for 12 months as provided for in the 2016 budget for which N68.7bn has been appropriated. Another palliative is the direct provision of very soft loans for traders and artisans, including agricultural workers. This is expected to reach a total of 1.76 million Nigerians, without the requirement of conventional collateral, with some of traders likely to get about N60,000 each. A total sum of N140.3bn has already been appropriated for this in the budget.

He went further to state that “payment of between N23,000 to N30,000 per month to 500,000 unemployed graduates who would be trained, paid and deployed to work as volunteer teachers, public health officers and extension service workers, among other responsibilities. They would also be given electronic devices to empower them technologically both for their assignments and beyond. Similarly, 100,000 artisans would also be trained and paid. N191.5bn has been set aside for this in the budget.”

There is a saying in the south-western part of the country that when hunger is out of poverty, things are getting better. As a result of this, the federal government dedicated and appropriated N93.1 billion in the 2016 budget to feed at least 5.5 million Nigerian primary school children – i.e. starting first in 18 states, three per geopolitical zone. These children would be fed for 200 school days under the free Home-grown School Feeding Programme.

Also worthy of note is the fact that 100,000 tertiary students in Science Technology Engineering and Maths (STEM) plus Education are prepped to partake in the N5.8 billion already provided for this education grant in the budget. And to avoid stories-that-touch-the-heart or what is humorously known as money-miss-road, the procedure is designed in such a way that this payment would be paid directly to the students.

For the government to be able to deliver, cooperation from all sectors must be solicited and assured. This is a reason why the Labour unions’ decision to embark on a nationwide strike action will only amount to “bombing for peace” or “hitting the head on the wall to cure headache”. There is no way the strike action will not further crumble the already fainting economy of the nation as every day the nation is shut down, billions of naira are lost. The people the unions are fighting for have more to lose if the economy is shut down, and the train of development may not only be slowed down by this action, but might end up being derailed.

An opinion article in the Daily Trust of Wednesday, May 14, 2016, captures another direction that makes the strike action an ill-planned effort by the Labour unions when the writer said, “It bespeaks of worrisome insensitivity not to realize that any strike or public demonstration stands the chance of being hijacked by the welter of aggrieved groups prowling all over the country only waiting for a trigger to unleash mayhem on the people.”

Without joining words with pro-strike activists, it is significant to understand that a union founded on a philosophy that rampage and out-and-out economic outrage and sabotage is the only language government understands without it providing rational alternative to the government position, such a union over time will become a darling tool in the hands of some individuals scheming for political and economic eminence.

Even the fact that there is division between the ranks of various unions as to whether the government made the right or wrong call should be enough for the umbrella bodies to sit down and sort out their camp before coming out to declare war on another body (government) that is still enjoying the support and trust of the populace. Nigerians trust the present administration to deliver. The least labour unions can do is to assist the government in making sure the government’s decision does not have a lingering adverse effect on the people it claims to represent. Labour unions should sit and dialogue with the government as to ways the present pains will be quickly alleviated to deliver the promised gains. “No pain, no gain” is the axiomatic expression that propels people towards success.

What I reckon is that the suffering of this present time is not comparable with the achievements that will soon come our way. The pains of today will sooner than later give way for the gains of tomorrow if only we keep trusting and supporting the government in words, actions and inactions.

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