Petrol price hike: Time to occupy Nigeria again
Tue May 17, 2016 01:12:pm National
2.1K By sosa hills
A one-time American women's suffrage leader, Olympia brown once said, "He who never sacrificed a present to a future good or a personal to a general one can speak of happiness only as the blind do of colours". This quote is a motivating factor to the response to Farook Kperogi's feature captured in Daily Trust of Saturday May 14, 2016.
Kperogi observed that his appeal to reoccupy Nigeria will not resonate with many. That president Buhari's emotional grip on the middle class is still firm. This conviction is true because Buhari has demonstrated the will to tame corruption and drive Nigeria to greater heights and I appreciate that defeat owned up by Kperogi for the global picture is a reference for us all.
The facts he presented could also be termed transposition, unequal and even lopsided. To compare pump price in Nigeria and what obtains in the United States can't stand. If we must look at it from that perspective, it should be holistic. Why not also consider GDP, infrastructure, main-stay of the economy, among others. No sector of the economy is independent.
For a country that depends on crude oil as its main source of income, it's best we juxtapose with entire states with similar status like ours and align where they've been, what they've done and where they stand at present. He further invited countries like Saudi Arabia, Algeria, Venezuela, Kuwait, Angola, Iran etc in comparison of pump price to crucify Ibe Kachikwu.
Many of us face the harsh reality, especially those present in Nigeria and it equally makes us sad, but we must look beyond now and fix tomorrow. All developed societies have had to part with goodies to secure a better future. In fact, others have had worse China, Japan and even the United States. What Nigerians need more now is that kind of sacrifice.
He also noted the poor minimum wage in Nigeria and yes that's true. N18, 000 is terrible but it's not as if government can just give directives to increase digits. What we have is what we can share. This country is simply not earning enough. The GDP of United states per capita today stands at $54, 421 and Nigeria with $2, 640, why the comparison of the two economies?
I am also not an economist but to agree a country spends up to 20% of its budget to subsidize a single product is unwise. Last year, over a trillion naira was spent on subsidy, if same is wasted this year then how do we crop with our bantam N6tr budget? To be pro fuel subsidy isn't a bad idea but in this situation, who subsidizes other sectors of the economy like manufacturing, agriculture, housing, ICT?
The embarrassing truth is that, so long as we can't cultivate enough basic food for our consumption, we don't provide enough electricity to power our industries, we don't encourage SME's, we'll always remain at the mercy of others. The era of dependency is long gone making modification inevitable.
America can afford to subsidize petrol because other sectors of her economy are vibrant enough to yield positive output. Kperogi cannot say that for Nigeria because reliance on roads bad roads, import of virtually everything - makes no point as what is being subsidized is our consumption power wheeled by foreign economies. Thus invariably, we keep other economies spinning while we weigh-down our reserves.
Another misplacement by kperogi was inclusion of Venezuela. She is typical of Nigeria relying heavily on imports of her basic needs - grains, milk sugar and even paper. Her purchasing dropped and president Maduro has been under pressure to stabilize his country. They've had to ration electricity for shopping malls, cut food subsidy and most interestingly, raised fuel prices by 6000%. It's glaring that Venezuela didn't save and invest in infrastructure to grow and diversify its economy, we can't tread that path.
I am also against subsidy removal but the best subsidy for sinking countries like Nigeria today should be production driven, lets invest and make affordable power generation, agric machinery, industry to create value within in exchange for value, not remain a consuming state.
Considerably, the analogy drawn from the state of Iowa in the United States where the Governor rejected "an 8 cent to 10 cent bump per gallon" doesn't add up because they alternatively opted for savings. Kperogi should know that Nigeria has not saved ruling out that option.
Saudi Arabia was also mentioned among states where petrol sells cheap but it seems Kperogi is unwitting of the fact that despite foreign currency reserves of over $700bn (enough to finance its expenditure for 6 years), the gulf state in December 2015 hiked its pump price by 40%, drafted a five-year plan to slash subsidies for electricity, water, diesel and kerosene. This is the world's largest producer of crude oil six times Nigeria's capacity with a population one-fifth of Nigeria. If Nigeria was Saudi Arabia, what will Kperogi term this move? Suicide I guess.
Algeria too shouldn't be compared to Nigeria as he did. That country has at least 5 functional refineries (Skikda refinery with the capacity of almost the three in Nigeria combined) to serve its domestic needs. The country has saved over $170bn in reserves from the boom and working to diversify with agriculture. In Nigerian markets, we find Algeria pasta, milk and even tomato paste. They've gained an edge over us and can afford to sell fuel cheaper at the pump.
If the global market takes a plunge, the best a regime can do for its people is to restructure just like UAE did with tourism, Saudi is doing with its new technical universities, cities; Kuwait and Bahrain are doing by cutting subsidies. The challenges are daunting and require bold and sincere response.
The mistake Buhari has made was not to have called in private refiners - modular and conventional provide agreements of secured investment. To transport crude to foreign refineries, refine it there and return refined product is a wicked business decision. The oil swap is a major fraud too and our 2000 unregistered borders have helped in subsidizing all our neighbours not to talk of the pipeline avengers of the Niger Delta.
What fuels our hope in Nigeria today is the 2016 budget and what it holds. In it, the Zungeru hydro power project to generate 700MW, another gas-powered power project of 215MW, Lagos Calabar, Kano Lagos rail lines, Ilorin Jebba Bokani road to link raw materials to industries; 7,068 mass housing units to be built, completion of Rimi wind energy project among many.
What else can we hope for other than fast-tracking proper implementation of this budget. We have a leader that has demonstrated the will to retrieve stolen funds, end insurgency and diversify our economy. It's a golden opportunity we can't afford to miss and Mr Kperogi should not encourage undecided fellows to support unsustainable programmes.
And if we resolve to "gobbledygook" over our today as Kperogi just did, our tomorrow will fall the way of Venezuela.
Abdulkadir Isa wrote this piece from Gombe state and tweets at @abdulkadirisa
Kperogi observed that his appeal to reoccupy Nigeria will not resonate with many. That president Buhari's emotional grip on the middle class is still firm. This conviction is true because Buhari has demonstrated the will to tame corruption and drive Nigeria to greater heights and I appreciate that defeat owned up by Kperogi for the global picture is a reference for us all.
The facts he presented could also be termed transposition, unequal and even lopsided. To compare pump price in Nigeria and what obtains in the United States can't stand. If we must look at it from that perspective, it should be holistic. Why not also consider GDP, infrastructure, main-stay of the economy, among others. No sector of the economy is independent.
For a country that depends on crude oil as its main source of income, it's best we juxtapose with entire states with similar status like ours and align where they've been, what they've done and where they stand at present. He further invited countries like Saudi Arabia, Algeria, Venezuela, Kuwait, Angola, Iran etc in comparison of pump price to crucify Ibe Kachikwu.
Many of us face the harsh reality, especially those present in Nigeria and it equally makes us sad, but we must look beyond now and fix tomorrow. All developed societies have had to part with goodies to secure a better future. In fact, others have had worse China, Japan and even the United States. What Nigerians need more now is that kind of sacrifice.
He also noted the poor minimum wage in Nigeria and yes that's true. N18, 000 is terrible but it's not as if government can just give directives to increase digits. What we have is what we can share. This country is simply not earning enough. The GDP of United states per capita today stands at $54, 421 and Nigeria with $2, 640, why the comparison of the two economies?
I am also not an economist but to agree a country spends up to 20% of its budget to subsidize a single product is unwise. Last year, over a trillion naira was spent on subsidy, if same is wasted this year then how do we crop with our bantam N6tr budget? To be pro fuel subsidy isn't a bad idea but in this situation, who subsidizes other sectors of the economy like manufacturing, agriculture, housing, ICT?
The embarrassing truth is that, so long as we can't cultivate enough basic food for our consumption, we don't provide enough electricity to power our industries, we don't encourage SME's, we'll always remain at the mercy of others. The era of dependency is long gone making modification inevitable.
America can afford to subsidize petrol because other sectors of her economy are vibrant enough to yield positive output. Kperogi cannot say that for Nigeria because reliance on roads bad roads, import of virtually everything - makes no point as what is being subsidized is our consumption power wheeled by foreign economies. Thus invariably, we keep other economies spinning while we weigh-down our reserves.
Another misplacement by kperogi was inclusion of Venezuela. She is typical of Nigeria relying heavily on imports of her basic needs - grains, milk sugar and even paper. Her purchasing dropped and president Maduro has been under pressure to stabilize his country. They've had to ration electricity for shopping malls, cut food subsidy and most interestingly, raised fuel prices by 6000%. It's glaring that Venezuela didn't save and invest in infrastructure to grow and diversify its economy, we can't tread that path.
I am also against subsidy removal but the best subsidy for sinking countries like Nigeria today should be production driven, lets invest and make affordable power generation, agric machinery, industry to create value within in exchange for value, not remain a consuming state.
Considerably, the analogy drawn from the state of Iowa in the United States where the Governor rejected "an 8 cent to 10 cent bump per gallon" doesn't add up because they alternatively opted for savings. Kperogi should know that Nigeria has not saved ruling out that option.
Saudi Arabia was also mentioned among states where petrol sells cheap but it seems Kperogi is unwitting of the fact that despite foreign currency reserves of over $700bn (enough to finance its expenditure for 6 years), the gulf state in December 2015 hiked its pump price by 40%, drafted a five-year plan to slash subsidies for electricity, water, diesel and kerosene. This is the world's largest producer of crude oil six times Nigeria's capacity with a population one-fifth of Nigeria. If Nigeria was Saudi Arabia, what will Kperogi term this move? Suicide I guess.
Algeria too shouldn't be compared to Nigeria as he did. That country has at least 5 functional refineries (Skikda refinery with the capacity of almost the three in Nigeria combined) to serve its domestic needs. The country has saved over $170bn in reserves from the boom and working to diversify with agriculture. In Nigerian markets, we find Algeria pasta, milk and even tomato paste. They've gained an edge over us and can afford to sell fuel cheaper at the pump.
If the global market takes a plunge, the best a regime can do for its people is to restructure just like UAE did with tourism, Saudi is doing with its new technical universities, cities; Kuwait and Bahrain are doing by cutting subsidies. The challenges are daunting and require bold and sincere response.
The mistake Buhari has made was not to have called in private refiners - modular and conventional provide agreements of secured investment. To transport crude to foreign refineries, refine it there and return refined product is a wicked business decision. The oil swap is a major fraud too and our 2000 unregistered borders have helped in subsidizing all our neighbours not to talk of the pipeline avengers of the Niger Delta.
What fuels our hope in Nigeria today is the 2016 budget and what it holds. In it, the Zungeru hydro power project to generate 700MW, another gas-powered power project of 215MW, Lagos Calabar, Kano Lagos rail lines, Ilorin Jebba Bokani road to link raw materials to industries; 7,068 mass housing units to be built, completion of Rimi wind energy project among many.
What else can we hope for other than fast-tracking proper implementation of this budget. We have a leader that has demonstrated the will to retrieve stolen funds, end insurgency and diversify our economy. It's a golden opportunity we can't afford to miss and Mr Kperogi should not encourage undecided fellows to support unsustainable programmes.
And if we resolve to "gobbledygook" over our today as Kperogi just did, our tomorrow will fall the way of Venezuela.
Abdulkadir Isa wrote this piece from Gombe state and tweets at @abdulkadirisa
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