The Hypocrisy Of Jonathan's Government.

Posted: November 13, 

By Leonard K. Shilgba, PhD

Have you heard that the government of President Jonathan plans to spend one hundred billion naira in 2012 to subsidize electricity tariff for “poor and rural dwellers”? According to the Minister of Power, Professor Barth Nnaji, the 3-year subsidy program shall begin in January 2012.

I have some niggling questions:

    •    If, as indicated in the president’s road map for electricity sector reform, private investors are being enticed to invest in Nigeria’s electricity sector, and the planned electricity tariff subsidy shall be used to pay private investors the differential in the price of electricity that they shall sell to certain categories of consumers at government subsidized rates, why is the case different in the energy sector, where the government is bent on removing fuel subsidy?

    •     The argument of government in favour of removing fuel subsidy is that if the subsidy is not removed (their obvious definition of deregulation of the energy sector) private investors cannot be attracted to build refineries. Why is the behaviour of private investors expected to be different when it comes to the deregulation of the electricity power sector? Would the implementation of the planned 3-year electricity tariff subsidy not scare investors from putting their funds into the sector? And if the answer is in the contrary, as I know it is, is government then not being hypocritical, and I dare say deceptive, in using that argument to support removal of fuel subsidy?

    •    Why is government not willing to implement the same program in the energy sector? That is, should government not determine and implement the correct subsidy in the energy sector (In 2011, for instance, the amount voted for subsidy in the budget was less than N 100 billion; but corruption has inflated this to more than N 650 billion by October this year, without any supplementary appropriation) while it lures investors with the right incentives, which should include appropriate legislation that should protect the investors’ funds, to build refineries in the country?

    •    Another argument of government in favour of removal of fuel subsidy is that the subsidy is unsustainable, and that government must save money to invest in “critical sectors of the economy.” Where will government get the N 100 billion from? Furthermore, how has government determined that the differential in pricing of electricity sold to “poor and rural dwellers” at subsidized rates approximates N 100 billion; and would that translate to 24-hour electricity supply daily?

    •    Another argument of government is that fuel subsidy only subsidizes corruption (i.e. the oil “cabal” in Nigeria makes false claims on subsidy funds), and accordingly, the Nigerian people don’t benefit from the subsidy. I am curious how the same government that has confessed its incompetence at checking corruption, in this case, the corrupt implementation of fuel subsidy, can suddenly acquire competence (and we are talking of competence in the next two months) to prevent the same corruption happening in the implementation of the electricity tariff subsidy. And if government can succeed in convincing Nigerians of the acquisition of this new competence, then why can’t it apply the same new-found competence in prudently implementing fuel subsidy and save Nigerians the hundreds of billions of naira that currently end up in the bottomless pockets of the oil “cabal” that President Jonathan lacks the courage to name and shame?

    •    What are the criteria that Jonathan’s government has to determine the “poor Nigerians” that shall benefit from the electricity tariff subsidy? Are all “rural dwellers” poor, according to government’s assumed criteria? Does government have data of Nigerians and their income levels? If government does not have this data would it commission such to be obtained between now and end of December before the commencement of the subsidy in January 2012? If government does not have such data and neither an arrangement to obtain the data before implementation, what can we conclude about the implementation of the planned subsidy?

I should expect readers to ask questions of their own about the issue. But this is my personal observation. In 2012, President Jonathan plans to remove fuel subsidy, devalue the national currency, and introduce toll gates on “federal roads built to international standard”. There is no announcement on the federal roads in Nigeria that shall be built to “international standard” in less than one year; I know of no federal roads in Nigeria that are of international standard, with all the safety infrastructure, rest rooms, tow vans, etc. Few weeks ago, I stopped at a spot on a federal road where Federal Road Safety officials were on duty. I stopped and demanded to know why a huge truck that had fallen down at a nearby intersection more than a month before was yet to be removed (There is a roundabout on this intersection one part of which was completely blocked by the fallen truck; and this location is close to the head of the bridge on River Katsina-Ala; this is the road the major that takes you to Cross-River state from Benue state). They told me that they had no tow van, and that there was none in the whole of that region!

Is Jonathan not going to create a mess trying to clean up a mess? Who are the people he is listening to? His government thinks up a solution without regard to the problems the solution will create. The government seems to lack sense of ordering its “Transformation Agenda”—For instance, what should be done first before removal of fuel subsidy? Is it necessary to announce restoration of toll gates on federal roads before building the roads to “international standard”? In governance, the people must be shown the profit before the pain is gradually introduced; it is wrong to administer an overdose of reforms, especially when they are painful, concurrently.

There is no cheery news for Nigerians in the coming year. And the government should not expect any cheery news either from Nigerians in the coming year.  I suspect that rigorous debates hardly go into decision-making process of his government. There is so much deceit in the presidency. Besides, the central government is weak in planning, communication, and implementation. But I hope that President Jonathan will remove the fuel subsidy next year and do all of the painful things he says he will do. Maybe then, the provocation that will make the country into a nation will be complete.