Much Ado About Subsidy

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University of Ibadan

University of Ibadan

Ibadan — IT was a mix of anger and consternation as eggheads within the academic community of the University of Ibadan held a symposium to examine the issues connected with the controversial removal of subsidy from petroleum products used by Nigerians, as proposed by government.

The symposium, which was put together by the Academic Staff Union of Universities (ASUU), UI chapter, was held at the premises of the university’s Institute of African Studies.

After extensive deliberations and informed contributions from members, the union roundly condemned the proposal and vowed to mobilise and lead the Nigerian masses to the streets in protest if the government’s attempts to go on with the policy.

The federal government’s plan to remove fuel subsidy has continued to generate debates among groups and individuals in the country since President Goodluck Jonathan, on Tuesday, October 4, 2011, conveyed his government’s intention to start its implementation from January next year.

Though some, particularly those in government, give arguments in its support, the vast majority of Nigerians believe the removal subsidy will add to the woes of the suffering masses.

While debating the issues at UI last week, discussants did not only look at the effect of the implementation, they also examined the level of veracity in the claims of the government on fuel subsidy.

Chief among the reasons advanced by the government to defend the proposal was that the money being used to subsidise petroleum products ends up in the purses of some Nigerians.

Besides this, the government added that the amount has remained colossal such that it negatively affects the discharge of its responsibilities in the provision of social infrastructures.

Since its refineries were grounded many years ago, Nigeria has continued to send its crude oil to foreign countries for processing and imports the final products to the country for local consumption.

The burden of the controversial subsidy is incurred through the importation of fuel to the country.

The government told Nigerians that it has to make up for the differentials in the actual cost of the products and the prices they are being sold locally.

But, many Nigerians see this argument as tacit acknowledgement of incompetence.

‘Is any refinery working in Nigeria despite all the monies spent and appropriated for turnaround maintenance?

I am not a prophet of doom but after Boko Haram another group will still emerge, because we are fed up with this system.

The system is full of injustice and as long as injustice exists in the country, people are reacting in the best way they can through deep-seated grievances,’ Ademola Aremu, ASUU chair, UI, said in his contribution.


However, former minister of Petroleum, Prof. Tam David-West, added a new dimension to the debate.

In his reasoning, the concept of subsidy is a mere ruse.

‘Oil subsidy is a sanctified falsehood, absolute lies. I challenge Goodluck Jonathan, Okonjo-Iweala, and Alison-Madueke to prove me wrong.

How can Jonathan stand in the way of the people? He is saying there is no going back on oil subsidy. I say no, he will go back. It is a lie to say Nigerians are paying the least oil price in the world.

Going by their analysis, Nigerian workers should be earning about N184,000 to be at par with their mates in USA.

They have killed refineries through sabotage.

‘You are asking the masses to pay for your inaction and asking them to tighten their belts because their waist is loose, while you grow belly and cheeks in Abuja.

How can Okonjo-Iweala be talking about economy now when she was being paid in dollars while working with Obasanjo?

This is hypocritical. They must not do it and if they do it, we must all go to the street. People should not stay at home,’ he said.

Aremu who joined other discussants including Prof. Isaac Albert, David-West, Kassey Garba and Adeola Adenikinju, said Nigerians are fed up with the injustice in the system and would be forced to react in the best way they can.

Giving credence to David-West’s position was Albert, Director of the Institute of African Studies, who also submitted that the country’s leadership has engaged in lies to paint incorrect pictures about the nation’s political and economic standing.

He wondered why the people at the helm of affairs continue in such manner while the country is collapsing under their watch.

‘Nigeria is moving towards a very dangerous point and this is one nation that lives in self-denial. The Nigerian state is collapsing.

Our security agencies are overwhelmed because we have a Boko Haram group that has been operating freely for the past two years and yet we have no clue. The economy is also collapsing, yet our leaders are deceiving us.


‘A friend in the central bank confided in me that they don’t really have the indices on the state of Nigerian economy but have to produce figures that the economy is growing at certain percentages.

Our leaders are deceiving us. Things are not going well with us. The director of NYSC just said they are not going to post corps members to Yobe and Borno.

Then, why are we abusing America when state governors are sending buses to these areas to evacuate their indigenes?

The U.S. is not saying don’t come to Nigeria but they are saying don’t go to Sheraton Hotel and Nicon Hilton.

America has credible intelligence, which we cannot collect here. If anybody will castigate me or arrest me for talking about my country where my children are to earn a living, let them arrest me.

If our country is collapsing let us shout it loud that it is,’ he said.

Speaking further, Albert said, ‘In Algeria, for example, government is no longer collecting tax from people because they are afraid of revolution.

In fact, the government grants three-year tax-free regime for some people if you approach the government about conditions in your home.

We are talking about palliatives. Why is it that it is when some leaders are making their system soft for their citizens, that is when our leaders are making life more difficult for their own fellows?’

Prof. Kassey Garba, the immediate past Chief Economic Adviser to Jonathan, who moderated the session, presented a better insight into the workings of the government.

According to him, government is filled with people who would not want things to work according to plan: ‘Even when we are saying Lagos-Ibadan expressway is killing people and needs to be fixed, there are still some people who do not want it done.

If we say let us stop trailers from moving towards Ojoo and make trains work to make it more efficient, people would still stand against it because they are shortsighted.’

Also, the immediate past Senior Special Assistant to the President on Economy, Prof. Bola Adenikinju, said though it is true that the subsidy is drawing down the economy and has depleted Nigeria’s foreign reserves, he noted it could be avoided if the refineries are put back in shape.

Apparently, because of the level of antagonism it attracts from the Nigerian public, the Federal Government has subsequently soft-pedalled on its decision to begin the implementation of fuel subsidy removal in January.

Petroleum Resources Minister, Mrs. Diezani Alison-Madueke, who disclosed this in far away Perth, Australia, said the government is putting it on hold till it conducts due consultation with Nigerians.

That notwithstanding, interest groups and notable individuals in the country have continued to prepare the people for a major showdown should the government, at anytime, increase the pump price of petrol beyond its current N65 per litre.

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