After The Storm, It’s Dialogue Time

THEFRONTLINES By Joseph Ushigiale

In the aftermath of the ten days of rage initiated by the #ENDBADGOVERNANCE group which spread across the country – although more pronounced in the northern part of the country than the south, the federal government decided to railroad its team to dialogue with critical stakeholders. The team embarked on a roadshow to state its case and seek greater understanding and patience to give the government time to stabilise.

And so last week, the Minister of Information, Mohammed Malagi and his delegation which included Special Adviser to the President on Information and Strategy, Bayo Onanuga, Director General, National Orientation, Lanre Isa Oniru and Senior Special Assistant to the President on Media, Tunde Rahman were in ARISE, THISDAY MEDIA GROUP corporate headquarters, Lagos.

Chairman and Editor-in-Chief, ARISE, THISDAY Media Group, supported by Managing Director of THISDAY, Eniola Bello and the Ombudsman, Kayode Komolafe and ARISE NEWS staff, moderated the interactive session. He began the session with an opening remark, praising the minister and his team for the visit and reminding them people are watching the lifestyle of politicians and government officials which does not reflect the realities of the moment.

Responding to the opening remarks, Malagi took time to make a compelling case as to why Nigerians have to be patient with the administration arguing that it inherited a comatose economy riddled with debts and a system that was not sustainable.

He cited the cases of fuel subsidies and the existence of multiple exchange rate windows. He condemned the retention of the fuel subsidy regime describing it as wasteful and a drain on the economy arguing that fuel subsidies benefited a few privileged people and encouraged the smuggling of petroleum products to neighbouring countries.

On the existence of different foreign exchange windows, he said it was necessary to close and unify the three different windows into one to ascertain the true value of the naira and do away with arbitrage.

According to him, the decision to remove fuel subsidies was not canvassed by Tinubu alone but his political opponents including Peter Obi and Atiku Abubakar who all included subsidy removal in their manifestoes.

Malagi enumerated the administration’s quick wins which are being witnessed with the rollout of the students’ loan scheme, CNG projects, Construction of the Lagos – Calabar coastal highway, Lagos – Sokoto super highway, approval of a N70,000 per month minimum wage for the Nigerian worker etc.

He concluded his pitch by calling on Nigerians to sacrifice and support the administration as its efforts at delivering democracy dividends would begin to manifest soon.

Without a doubt, when you appraise President Tinubu’s policy thrust, you will come away with the impression of a well-intentioned president. He also comes along as a President with a listening ear and has empathy. There have been instances when Tinubu had to rescind decisions already taken as a result of public outcry.

Take the students loan scheme for instance, it would pass as a first by any administration. With this scheme, a window of opportunity opens for indigent Nigerian students to access quality and affordable university education. Now the scheme is offering a glimmer of hope for those students who would have dropped out of school for lack of finances.

Nigerians especially in the diaspora no longer have sleepless nights fretting over the procurement or renewal of international passports, thanks to the revolutionary policies that have liberalised the process. A lot is also being done in information and communication technology where the government has signed up with Google to deploy cutting-edge training for Nigerian content creators to monetise their skills.     

Now, where did it go wrong? President Tinubu swept into office after a highly competitive and divisive campaign and election that divided this country down ethnic and religious lines. The outcome of the highly contested presidential election ended in the Presidential election tribunal and the ruling is still a subject of debate to date.

This is why, in his inaugural speech, he called for unity and support from Nigerians. Yet, in their anguish, Nigerians were all united against fuel subsidy retention. So it was not just Obi and Atiku who canvassed for it, it was a national battle cry for subsidy to be removed and the opacity that has shrouded the conduct of oil business in Nigeria in secret and leaving filling stations gasping for products and people sleeping in filling stations be laid bare.

Nigerians needed a breath of fresh air, a new lease of life from Tinubu and for him to show that he understood the murky waters of shadowy oil deals. The conditions for the subsidy to be removed were simple: ensure you rehabilitate all or two of the local major refineries to stimulate local production, cut back on costly fuel import, conserve foreign exchange, and save the naira and jobs for Nigerians.

Had Tinubu charted this course, Nigerians would have heaved a great sigh of relief and saluted the President because that would have saved Nigeria from spending its scarce forex to import mostly poisonous fuel, reduced cost per litre if the 16 import levies paid on imported petroleum products are not inputted in the price of locally refined products. The ordinary Nigerian believes that petroleum products could be cheaper if refined locally and that dreams remain an illusion to this day.

Nigerians are angry. At the time of this report, the NNPCL has just announced that the inauguration of the Port Harcourt refinery which has been its poster boy in ‘renewing the hope’ of local refining has again been put off and dashed. This will be the sixth time the refinery’s inauguration has been postponed after payment of $1.5b for turnaround maintenance. It is now clear that the powers that be are hell-bent on making sure that none of the three national refineries work. Another bizarre saga is now playing out between NUPRC and Dangote Refinery over crude allocation for production. Do you see why Nigerians are angry? 

The minister also made a case about Nigeria’s petroleum products being the cheapest in the world and why they are being smuggled across borders. Is this not a very lame excuse and a crass display of a lack of creative thinking? For a fully privatised oil company, it beggars reasoning why the oil company did not see this apparent challenge as an opportunity.

If Nigeria’s petroleum products are much sought after in neighbouring countries, does it not automatically make it apparent that it presents a compelling reason for the oil company to recognise business opportunities on the West African coastline? Is there any reason or law restricting NNPCL from applying for retail licences in these countries to open filing stations and flood these countries with petroleum products? Can you imagine the humongous profits NNPCL would have been making if it decided to transform smuggling into a profitable commercial model?

Let’s examine the effect of merging the different forex windows. The former governor of the central bank, Godwin Emefiele under President Muhammadu Buhari’s administration spent billions of dollars to stabilise the naira. The naira was devalued several times and with the different windows in operation, arbitrage set in. Thus, there was a need for intervention to bring sanity to the financial sector to save the naira and the economy. Following the closure of the different Forex windows and the flotation of the naira, the currency became volatile and moved from $1 to N800 to $1 to N1600. The immediate outcome was runaway inflation from 23% to over 33% within seven months.

Every new President has his core support base and this base has great expectations of the new President. For Tinubu, the current hunger, pain and misery are not what they were expecting. Most Nigerians see the President now as lacking empathy and his policies as punitive.

After the protest, the Minister of Industry, Doris Anite estimated that the protest cost the economy N500billion daily while it lasted. So cumulatively, Nigeria lost N5 trillion to the protests simply because of fuel subsidy and naira flotation. Is this the price the President can pay for the two policies that have become the linchpin of his administration?

We were told to sacrifice and be patient for the administration to succeed. There has been no administration since independence in 1960 that has not urged the people to sacrifice. The irony is that, while Nigerians are sacrificing, politicians, technocrats and some privileged few with their families do otherwise. They live in opulence and openly exhibit and flaunt their extravagant and flamboyant lifestyles and the same people you ask to sacrifice are not blind and they see these things daily. Why won’t they be angry? Why not practice what you preach for once?

The Tinubu administration has three years ahead and it is still redeemable if it takes some steps back and does the needful. For instance, with inflation reducing by 2.2%, there seem to be silver lining in the horizon and the President must muster the political will to get local refining back on track. Nigerians are desirous of seeing their refineries produce products for their use rather than importing. The gains in refining locally are in quantum and the President does not need to be reminded of this. We need to create jobs, stabilise the naira and stimulate local production of goods and services from derivatives that will be accrue from the refineries.

While the current efforts at building infrastructure are salutary, the paucity of funds and the model of borrowing to finance infrastructure is digging us into a deeper debt hole. We had hoped the President would think out of the box and bring a new financing model to underpin his infrastructure financing. Regrettably, the President is reinventing the wheel and regurgitating the same old ways that took us nowhere but huge debts and corruption.

The current infrastructure development thrust is very limiting and myopic. The President can do better than this. He can still define his presidency by expanding the scope of the projects and embracing a creative and robust financing model that would inject foreign direct investment into the country.

The current Lagos – Calabar coastal highway and Lagos – Sokoto superhighway in addition to several other interventions on the railway should be relaunched. The President should launch a very ambitious project to build 10,000 km each of road and rail crisscrossing the country. Tinubu needs to float a $300 billion international infrastructure bond to inject foreign direct investment into the country.

 This will be followed up by an international tender for reputable investors to bid for sections of the project either the road or rail on a build operate and transfer Public Private Partnership model. To achieve this, he needs to put in the necessary legislation backed by sovereign guarantees to engender trust and transparency in international investors.

If 10,000 km of roads and rail each are divided along the six geo-political zones, any investors interested can bid for the section bring in his money, build, operate for an agreed number of years and transfer. In this way, the government will be relieved of the burden of borrowing, our economy will be reflated, and the projects will have multiplier effects on society.

In the absence of reliable legislation, no investor will be willing to bring in his money. In addition, the conduct of such an affair must not be opaque and shrouded in secrecy as was the case in the coastal highway. Once there is trust, investors will flood into the country with their money. It will be a great win for the administration because such a model will lay the basis for corporate governance, build institutions and stamp out corruption.