Deregulation: Nigerian Economy On The Brinks Of Total Collapse As Labour Dares Buhari To Throw The Nation Into Crisis

By Stephen Ubanna

When President Muhammadu Buhari, a retired army General, and members of his economic Management Team, under the close watch of Yemi Osinbajo, the Vice President, took the decision to allow the Nigerian economy float, instead of introducing some measures of control to protect the masses, they may have expected Nigerians to jump at the offer. This is because of the anticipation that it would help them to sell their products based on the market economy rate to make profit to sustain their business.

  Mele Kolo Kyari, Managing Director of Nigerian National Petroleum Corporation, NNPC, may have made matters worse when he disclosed recently that a litre of Petrol will sale for N340.00, by February 2022. Even before the NNPC, Chief Executive officer, CEO, made the disclosure, the gas marketers, who had taken advantage of the deregulation of the Liquefied Petroleum Gas, LPG, market, have already increased the price of their product. Take for instance, a 6Kg cooking Gas, cylinder, that that used to be refilled with about N1,500.00 had shot up to N4,500,  in less than one month because of lack of government control of the market.

Kyari: MD, NNPC, Says A Of Petrol Will Sale For N340.00 Next February

Not many people may be aware that the NNPC, CEO, has the mandate of the Katsina state born Nigerian President, and who incidentally is Nigeria minister of Petroleum Resources to speak on the c Controversial issue. Indeed, he may be testing the waters to get the reaction of Nigerians to the new policy.  The Nigerian President body Language and policy pronouncements in the recent in recent time has clearly shown that the government  is not going back  on the proposed deregulation of the  importation of Petroleum products, particular,, Petrol , into the Nigerian market , for retails  at the filling stations.

 The Nigerian President may have had at the back of his mind that by allowing the Nigeria economy to float and adopting a populist policy of paying N5,000.00 for the next six months to the population of 30  to 40 million  poor Nigerian to subsidise their Transport fare would encourage  the people to support policy.

 The question on the lips of most people: who is a poor Nigerian and what is the criteria of identifying a poor person.  They noted that this is not the first time the government had come out with such a populist policy that had failed woefully.  They had cited the Presidential directive for the payment of N20,000.00 relief Fund, to poor Nigerians , under its  Conditional Cash Transfer Scheme, which  covers a fourth period, but that was how far, the government could go.

  They were said to have also cited the distribution of N10000.00 to support market women in 20219, which was said to have taken Osinbajo, the Vice President to different parts of the country to supervise the distribution.

 Another interventionist populist policy of the Administration that was the Payroll support Programme which was designed to mitigate income loses due to the adverse effect of the Asian country of China coronavirus, popular COVID 19, but turned out to be a failure. This may have informed why people believe that ther would not be any difference with the proposed payment of N5,000.00 to poor Nigerians , in the next six months to cushion the adverse effect of the Deregulation of the pump price of Petrol  in Nigeria.

Prior to the Nigerian President  policy Statement, on the proposed removal of Petrol subsidy and payment of N5,000.00 to 30 million – 40 million , poor Nigerians, Hajia Zainab Ahmed, minister of Finance,  Budget and National Planning  had dropped the hint in Abuja, the Federal Capital Territory, FCT, that the government may no longer subsidise  importation of Petrol,  due to the country’s  limited resources . 

Hajia Ahmed: Minister Of Finance, Budget And National Planning

The minister, who may have spoken the mind of the retired army General, had said that the N140 billion to N150 billion , that the government spends on the monthly importation of petrol, would be channeled to fund the country’s educational and health sectors  of the economy which had suffered for too long. She had told those cares to listen that ‘’the subsidy regime in the nation’s Petroleum sector remains unsustainable and economically disingenous’’.

\ She may have had the feelings that with the recent development s in the nation’s oil sector such as the signing into Law of the Petroleum Industry Bill, PIB, passed by the National Assembly, and the full reactivation of the 445,0000b/d broken down four refineries in the country and the completion of the private refineries under construction in 2022,   it would significantly boost the contribution of Petroleum products from the sector to boost the country’s economic growth efforts’’.

Silver Temipre, a former governor of Bayelsa state and minister of state, Petroleum Resources, may have  also spoken the mind of the retired General, when he said ‘’the government  will no longer be fixing  the pump price  of petrol in the country’’ in order’’ to give room to the markers run their business and make profit’’. We have stepped back , he had said.

 He had contended that the government focus now is on ‘’protecting the interest of the consumers and making sure that marketers are not profiteering’’, from the deregulation of the nation’s Petroleum  products market to increase the pump price of  products, particular, petrol by unnecessarily.  He may have given an insight to what the government had intended to do:  payment of the N5000.00 transport allowance to poor Nigerians to cushion the adverse effect of the back lash of the policy on the economy.

It is instructive to note that this is not the first time that the Buhari Administration had proposed the deregulation of the country’s Petrol market in the country over the last six years. The economic Advisers were said to have always been guided in the advice to the President based on the report of the officials of the Petrol Products Marketing Company, PPMC, a subsidiary of NNPC, on the deregulation of the Petroleum Products market.

Political Observes believe  what the  Buhari  Administration is doing to increase that pump price of Petrol to generate more  revenue to run  the government may not different from what the past Administrations in the country had  done.  From Ibrahim Bbangida, a retired army General and former military President,  to  President Goodluck Jonathan before the present leadership of the country, the story is the same: removal of petrol subsidy.

A Petrol Tanker At A Lagos Port

Take for instance, the last Pump price increase, the NNPC, subsidiary  had announced a new ex-depot price of N151.56 per litre of petrol. Note that the ex-depot price is the price the marketers buy the product  from depot owners. In 2020, the Nigerian President had said that the government ‘’removed subsidy on petrol to stop the mismanagement of tax payer’s money and eliminate the Corruption associated  with subsidies’’.  This may have informed why the retail price of petrol increased by about 10% to about N160.00 per litre.  

Note that subsequent   Buhari’s announcement of the proposed plans to remove Petrol subsidy and the payment of the N5,000.00 transport fare subvention to some  30million to 40 million Nigerians,  Hajia Ahmed, the minister of Finance, had hinted  that ahead of  the target date  of mid 2022 for the complete elimination  of fuel subsidies in the country, ‘’the government was already working with the partners  on measures to cushion  the potential negative  impact of the removal of the subsidies  on the most vulnerable  at the bottom  from 40% of the population’’. She may have alluded to the World Bank and the Multi-lateral Financial Institutions that the government is owing trillions of naira and which needed their debt to be paid at all cost.

  Solomon Adeola, Chairman, Senate Committee on Finance, may have shocked Nigerians, when he revealed that  ‘’there is no provision  in the 2022 budget  for the monthly N5,000.00 transportation allowance for 40 million Nigerians intended to cushion  the effect  of the planned petrol subsidy removal’ as proposed by the government.The Senate Finance Committee Chairman, may have made Buhari to understand that before he could embark on such intervention, ‘’the proposal must come to the National Assembly for approval’’, because of the huge financial involvement.

 He noted that ‘’there is no way the  Buhari led Executive arm of government   could take such a unilateral decision  on a pogramme  that is expected ‘’to gulp  close to N2.4 trillion  without getting the approval of  the National Assembly’’.

The Nigerian President may have drawn the hand of the back for the newly incorporated Nigerian Petroleum Company  ltd, under the close watch of Kyari to take off as a Commercial outfit as he has directed  the immediate   suspension  of the inauguration  of the newly Constituted Board  on Wednesday, November 24, 2021 till further notice’’.

Femi Adesina, Special Assistant to the President on Media and Publicity had said that he took ‘’the decision in his capacity as the minister of Petroleum Resources’’. According to the Media Aide,  he took the decision in  ‘’consonance  with section  53(1) of the Petroleum Industry Act, PIA, , 2021, which requires  the minister of Petroleum Resources to cause  the incorporation  of the NNPC Ltd within six months of the Commencement of the Act, in Consultation with the minister of Finance  on the nominal shares of the Company’’. Boss Mustapha, Secretary of Government of the Federation had said that ‘’a new date for the inauguration of the Board will be announced in due course’’.

Buhari and his policy makers, may have taken their decision to finally remove subsidy on the pump price of petrol  and proposed monthly payment  of the sum of N5,000.00 to 30 million to 40million poor Nigerians as palliatives, the Nigeria Labour Congress, NLC, under the Leadership of Wahab   Ayuba  , has rejected it,  describing it  as ‘’penny wise pound foolish’’.

Comrade Ayuba: NLC President

An aggrieved Ayuba, had accused  the Buhari government of  ‘’adopting  monologue  in arriving  at its conclusion  on subsidy removal , stressing that  ‘’it will continually reject  deregulation  that is anchored  on the importation  of petroleum products’’. He averred that the contemplation by the Buhari led APC government to increase the pump price of petrol by over 200% is a ‘’perfect recipe for an aggravated pile of hype inflation and increase in the price of food items in the market and services.

There are fears that the economic situation of the country may be become worse in 2022, as the Leadership National Association of Nigerian Students, NANS, vows to mobilise to protest against proposed removal of subsidies on Petrol. Adebayo Asefon, the NANS President, who may have taken the footstep of Ayuba, the NLC, President and with the backing of the Nigerian students who are exposed to severe hardship due to the spiraling inflation in the country and high cost of transportation has rejected the government’s plan  to pay N5,000.00 to 40million poor Nigerians to cushion the effect  of the proposed increase in the pump petrol price of petrol.

Nigerian Commuters: Face Harder Times In 2022, Due Proposed Deregulation Of Importation Of Petrol Into The Country

NANS may have sent sent a message: Nigeria will be shutdown should  the government attempt  to remove the Petrol subsidy as alleged being proposed’’, which may further dislocate the economy  and create more hardship in the country that may worsen the insecurity in different parts of the country.       

Recall that the Labour activists had earlier sent a signal to the Nigerian President to prepare for crisis in 2022, as the country would be thrown as Labour mobilise workers to protest the proposed planned removal of Petrol subsidy and payment of N5,000.00 to some 30 million to 40, million poor Nigerians.

In spite of the fact that the Buhari led All Progressive Congress , APC, government, has not forward the bill to the National Assembly for approval for the removal of petrol subsidy and the the payment of N5,000.00, that will cover six months for 40 million poor Nigerians, Manufacturers and traders have taken advantage of the unofficial pronouncement to increase in the cost of their goods and services, including food items sold in the market.

The situation is so worrisome as the price of goods and services have continued to change on a daily basis and which should be blamed on the government for poor Management of Information. Even if the government decides to put the decision on hold to avoid throwing the nation into crisis next year, it would be very difficult for the price of these locally and Foreign manufactured products and services , including food items , sold in the Nigeria market to drop again. This is where President Muhammadu Buhari and his Policy analysts may have to go back to to the drawing board to decide on the next step of action before the situation moves from” worse to worst” where the poor Nigerians, that the Nigerian government is planning to protect may no longer be able to feed themselves but become problem to the society.

Additinal Reports by Lateef Adegbite and Elizabeth Chukwuma

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