Still Borrowing from Tomorrow…

…I want to preface my intervention with a story I told sometimes in 1999 or thereabout which is still very relevant today. And like I did back then, I seek the indulgence of readers because the story is about a supposedly loving couple having problems which bordered on sex. The husband happened to be a man with healthy appetite hence he would not allow his wife any breathing space. After putting up with his antics for some years, she took the matter to her in-law as the ‘court of first instance’. After narrating her story, her mother-in-law asked whether her son was maltreating the wife in other ways; she said no. Was he providing for her as he should? She answered in the affirmative. The parents of the husband declared that the wife had no case because their son was only claiming his rightful entitlements. Case dismissed!

Defeated, the poor woman accepted her fate for a while before reporting to her own parents. Let us call this the ‘court of appeal’. Here, they equally asked the same set of questions her in-laws asked. Her mother however added: “Is your husband dating another woman?” She said no. In the ruling that followed, they scolded their daughter for attempting to shirk her marital responsibility. The appeal therefore failed and the man continued to claim his entitlements. Ultimately, the wife took the matter to their local pastor as the final arbiter, if you like, the ‘Supreme Court’. Having listened to the ‘petitioner’, the pastor sent for the husband so he could hear both sides. When the husband came, the pastor asked the wife to retell her tale which she did. “Is it true?” He replied: “It is true Sir but the problem is that I don’t want to have any affairs outside.”

This to the pastor was a serious problem but after a discussion that involved bargaining and trade-offs, it was agreed that a maximum of three times a day was enough for any couple. Thus a ceiling was effectively placed on how many times the man could ‘harass’ his poor wife a day. It was a Friday evening and back home, the man, quite naturally, claimed his ‘quota’ for that day. Then came Saturday: To cut the story short, by mid-day, the husband had performed his matrimonial obligation three times and the wife thought she would be left alone. When he therefore started behaving funny again, she exploded: “What is the problem? Have I not met my responsibility for today?”

Looking crestfallen, the husband replied: “Yes, I know, but please lend me one from tomorrow’s…”
The friend who told me this story said it was a real life situation. He may be right or it may just be another ‘fabu’ but what is not in doubt is that what we are dealing with here is a metaphor for the Nigerian condition and our proclivity to borrow from the future. Like the irresponsible husband in the story, whose marriage was definitely bound to crash at some point, we have been borrowing so much from the future that it is only a matter of time before we reach rock bottom.

Like most commentators, I can make a thousand arguments on why it is callous to overburden the poor of our people by removing the current subsidy on fuel. I can canvass brilliant ideas to justify why, if it is only cheap petrol that the people enjoy, so let it be. I can present moving stories of the social consequences of the removal of subsidy: The pain, the anguish and the tears to come. Yet given the situation on ground, there is no way we can continue with the corrupt, inefficient and unsustainable subsidy regime. To do so will amount to entrenching a culture of continually borrowing from tomorrow…

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I wrote the foregoing on this page on 13th October 2011 and it becomes instructive against the background of the pain and disruption we have all had to endure in the past three weeks. I am currently in Kwara State with my family and I can attest to how life has been difficult for majority of our people as a result of the fuel scarcity that has also led to the blockade of several roads. But for the benefit of those making allusions about the scarcity being contrived to punish people who practice a certain faith, we may need to remind them that this is a familiar problem that, in many respects, puts in dire perspective, the tragedy of Nigeria.

Thanks to Whatsapp, in circulation is the bromide of the front page of the 26th December 1978 edition of the iconic newspaper of the past, ‘Daily Times’ (that is 39 years ago!) with a banner headline: “Xmas Trip in Tears…As motorists crawl for fuel”. With the photograph of vehicles on a queue that stretches kilometres, the first paragraph of the story reads: “Scores of families from Lagos going home for Christmas got there in tears—victims of artificial fuel scarcity.”

Incidentally, a year and a half before that bleak Christmas for travellers, on 7th June 1977 to be specific, the same ‘Daily Times’ had also carried a news report titled “Fuel crisis may be over next year”. The story was accompanied by the photograph of a certain Major General Muhammadu Buhari, in his capacity as the then Federal Commissioner for Petroleum, even though it was one J.J. Akpeyi, described as a senior official of the Nigeria National Petroleum Corporation (NNPC), who made the commitment on behalf of the federal government of Nigeria. More than 40 years later, nothing has changed!

It is within that context that we should situate the agony of the past three weeks even when the challenge of the moment is that in practically all sectors of our national life, we don’t seem to learn useful lessons from our past as we continue to make the same choices that have led us to where we are today. Yet, as conventional wisdom teaches, you don’t continue to do the same thing while expecting different results. Nothing indeed demonstrates that reality than the management of the downstream sector of our petroleum industry on which we have wasted trillions of Naira even when the fuel is never available when Nigerians need it the most.

What is even more unfortunate is that no administration has had more opportunities to change the trajectory of our nation as much as this administration yet it continues to bungle them one after the other. When in April 2016, there was a crisis of this nature which led to a 66 percent increase in pump price, the expectation was that we were not only rid of fuel subsidy with all the attendant corruption but that the government would inaugurate a full deregulation of the downstream sector of the petroleum industry.

Despite the anger that greeted the astronomical increase, many of us supported the decision by the government because we felt it was the correct thing to do in the long-term interest of the country. Not a few stakeholders also lent their voices to the decision as a necessary one that is in tandem with President Buhari’s avowed commitment to fight corruption.

In a statement titled “Ending price fixing, the making of economic sense” released on 20th May 2016, the All Progressives Congress (APC) National Leader, Asiwaju Bola Tinubu, said the country had for decades entertained distortions in the downstream oil sector by operating an opaque system susceptible to manipulations and structured in a way that allowed only a few people to be feeding fat on the misery and frustration of millions of Nigerians. “President Buhari, after carefully weighing the options, decided to do what is right. In an act of courage, he removed the oil subsidy, thereby freeing the downstream component of this strategic sector of the economy from the distortions of price fixing.”

Apparently for the benefit of those who may not understand what the subsidy regime is all about, Tinubu told Nigerians: “The bogus supplier was paid for supplying nothing, while you sweated in long queues for fuel that was never there. The smuggler secreted fuel across the border, while our economy crossed the border into fuel scarcity…While the price of fuel was cheap on paper, these were the hidden costs that made the subsidy regime an expensive and heavy yoke that the nation could not continue…”

However, as it turned out, beyond just increasing the pump price, the Buhari administration has done nothing different and may, in fact, have compounded the problems in the sector with some of its choices. It is the consequences that we are now suffering. Despite all the misleading statements by government operatives in 2016, there was no removal of subsidy. What the federal government simply did was to look the other way by allowing the NNPC to continue running the show. That is why the statement by Vice President Yemi Osinbajo is rather unfortunate because it is not true.

According to Osinbajo, “NNPC is trading in fuel; the Federal Government is not, at the moment, paying for any subsidy. NNPC is trading. If you are buying and selling fuel, you would have to be able to pay for it. So, it’s not a question of government provision for subsidy, the Federal Government, at the moment, isn’t paying any subsidy. And don’t forget that the way that the NNPC trades is that, in many cases, NNPC is actually giving fuel; there is 445, 000 barrels of fuel. So really what you are seeing, in many cases, is more or less an exchange for PMS. So at the moment NNPC is paying the cost”.

Aside the fact that this has always been the situation, even in years when nominal figures were put in the budget for subsidy, giving free reign to NNPC is more counter-productive than actually budgeting for subsidy if the government is not ready for a full deregulation of the downstream sector. The statement by the oil marketers under the aegis of Depot and Petroleum Products Marketers Association (DAPPMA) has exposed the folly of the current arrangement. “It is on record that any time NNPC assumes the role of sole importer; there are issues of distribution because it is marketers who own 80 per cent of the functional receptive facilities and retail outlets in Nigeria.”

If the federal government believes that by effectively outsourcing its responsibility to NNPC, it has resolved the problem in the downstream sector, then we are in far bigger problem than many of us imagined. What it means is that this problem will be with us for a very long time. We give 445,000 barrels per day to NNPC for domestic consumption. The corporation deducts subsidy and other spurious charges upfront and remits balance to the Federation. This allows the NNPC to continue playing its usual games.

It is indeed instructive that at some point, subsidy disappeared but with the increase in crude price and no subsidy, only NNPC can import. We have been in that situation before with disastrous consequences, because we failed to deregulate when we ought to have done so.

Complete deregulation will remove government from fuel supply and pricing. The only role would be to ensure quality, safety and proper measurement. Price might go up initially, but would eventually be reasonable due to increased competition. What government could have done is to put in place mechanism to cushion effect of immediate shocks on the vulnerable for maybe a year or two. People will get used to prices going down and going up, like the price of other goods and adjust accordingly. Mobile phone SIM cards which at one time used to cost as much as N40,000 now costs almost nothing due to competition in a market driven by volume.

On full deregulation, there have been two missed opportunities: during the honeymoon period in 2015 and in 2016 when the foreign exchange situation forced the hands of the Buhari administration. While I am well aware it is a bit more complicated now, especially with growing anger and coming elections, the present arrangement will not rid us of fuel queues in 2018, except government finds a way of absorbing the subsidy or devalues the Naira. Therefore, full deregulation, despite its cost, remains the way out. And the longer we delay the decision, the more we keep borrowing from tomorrow.

While this conversation will continue, I wish all my readers a happy and prosperous year 2018.

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