By Ferdy Adimefe
“…the huge cost of subsidy is only a symptom of an entrenched disease called corruption.”
2012 seemed to have ushered in various controversial policies all at the same time. Much of last year, the Federal Government complained that the huge budget deficit might cripple an already wobbling economy if subsidy was not taken. But, the eventual removal has created despondency in the air, which leads me to worry if the manner of removal was done rightly and timely.
I am a layman who has never been in government but I understand that policy changes such as the fuel subsidy removal has had a shocking effect on many people. The government claimed that the existence of fuel subsidy, which over the years gulped an estimated N 1.5 trillion was a corruption hole, but now even with its removal, people still nurse genuine fears that a deregulated market could spiral an inflation that would hit the masses the hardest. So both situations bite at both ends and the only way the condition can become any better is if the federal government mitigates this short-term unpleasantness by ensuring that it puts in place a credible pricing model to checkmate inflation and other excesses that can come from deregulation?
There has to be a strategy to change how this policy will be implemented and it might be based on how these questions are answered; can we get our refineries to perform at optimal level? What modalities can we use to review the licensing framework for private refineries? Should the government buy equity in the private refineries with the Excess Crude Account or Sovereign Wealth Fund? Or should the government give sovereign wealth guarantee to those who are willing to set up private refineries? What are the changes that can be made to ensure that the regulatory environment does not pose threat to the viability of the private refineries, with the NNPC as a competitor? The problem as the FG pointed out is the corruption of the subsidy regime, the huge cost of subsidy is only a symptom of an entrenched disease called corruption.
A persistent fear is that the funds will become largesse for our rapacious politicians; a legitimate concern given our infamous history. No doubt, corruption is our unholy pastime and it is killing not just subsidy regime but our nation. However, the FG should understand that removing fuel subsidy in one swoop without tangible plans to effectively annihilate the monster called corruption, is only an exercise that will give a futile result.
The hydra headed monster – after the numbing taste of subsidy removal will rear its ugly head in another area. And the vicious vortex –our famed corruption that has held Nigeria and Nigerians in its wicked embrace will continue apace with us. The question one might ask is: “can the government strengthen our anti-corruption institutions and other regulatory agencies that have been put in place to tackle corruption?” If we strengthen our institution and salvage much of what is lost to corruption, there might be no need to remove subsidy.
The price of change must first come from the top and trickle down to the bottom. I believe those who preach the message of change should lead the change charge. I believe the government should lead the austerity measures by first subsidising the hugely expensive cabinet, through pay cuts and salary review for our elected officers and their serving counterparts sitting allowance.
Nigerians cannot continue to throw money away in the name of subsidy; neither can they continue to sponsor government excesses in a ‘business-as-usual’ ruinous splurge so the government should not expect the suffering masses to, solely, shoulder the price of change.