By Dele Sobowale
Too much inequality can harm the efficient operation of an economy…excessive inequality can have two perverse consequences: first, the very wealthy lobby for favours. Contracts and bailouts that distort markets; second growing inequality undermines the ability of the poorest to invest in their own education…These factors mean that high inequality can generate further high inequality and eventually poor economic growth.
Professor Lawrence Katz, Harvard University economist, 2011.
If not for anything else, the masses, the silent majority, about 96% of Nigerians, now 167 million, must be prepared to occupy selected places, once the fuel subsidy is removed without government, first of all, fishing out the members of the cabal feeding fat on NNPC and its operations. Even the President has admitted there is a cabal; the House of Representatives boasted recently that it will name them; the people are waiting. We want to know the vultures of NNPC. But, that is only the beginning; we also want to know the vultures of PTDF, NPA, CBN, PHCN, CUSTOMS etc.
One group of vultures is already known – they are the elected officials; irrespective of political party. Forget all the nonsense about “progressives” and other self-acclaimed titles; they have all become inured to the inequality which, not only Professor Katz wrote about; but the former IMF Chief and Professor Stiglitz as well.
Nigeria is the only country where a Ward Councillor earns more than a full fledged Professor! Surely, the Federal Minister of Finance knows that. Inequality in sharing the proceeds of the vaunted 7% and above economic growth has created a situation where Nigeria is also the only country in the world where the GDP is growing at over double the rate of population without jobs being created. There is only one explanation; government has created a situation where the benefits of growth have been privatized by a few people while the attendant risks of poverty have been socialized.
In other words, they have been passed to the rest of the people. Subsidy removal without addressing inequality will merely pass more burden to the people while increasing the gap between the favoured few and the majority. One individual and his conglomerate of businesses receive more subsidy than 100 million Nigerians. Yet he employs less than 50,000. Can anybody tell us where is the equity in that?
Once so called subsidy is removed, prices of cement and fuel, in particular, will go up.
Among the leading members of the National Economic Management Team are people with heavy investments in cement and petroleum products. They will be the initial and inescapable beneficiaries of the policy. They number less than two thousands. The victims include virtually the rest of us; but most especially, pensioners and people on fixed incomes. A few Nigerians, less than six, will move up the Forbes List of the world’s richest people; the majority will slide down and join the “wretched of the earth” (apologies to Franz Fanon).
President Jonathan might deny this all he wants; just as he denied owning assets which Code of Conduct Bureau, CCB, later discovered. But, those will be the initial consequences of subsidy removal – more for the rich; even less for the poor – unless the issue of inequitable distribution is addressed simultaneously.
It is interesting that while the President speaks without hesitation on the need for subsidy removal, he tells us that the “details of the palliatives are still being worked out”. That is akin to a surgeon announcing that, “I will sedate the patient; cut him up; but details about how to wake him up later are still being worked out!!”.
Amazingly, President Jonathan speaks as if he is a stranger to Nigeria – a Johnny Just Come, JJC – as we used to call new arrivals in the 1970s. Was he, by any chance in Outer Mongolia when Obasanjo announced the Austerity Measures in 1978 and proceeded to borrow $2.8 billion from the IMF?
Those policies were supposed to result in sustainable gains after the temporary pains. The $2.8 billion disappeared without trace; the debt remained for years; the promised gains never materialized. Instead under successive governments, the $2.8 billion grew to become over $36 billion; the technocrats who advised Obasanjo that the country was under-borrowed and could easily repay were silenced – at least for a while.
The technocrats, led by the acclaimed leader of the Organised Private Sector, OPS, Chief Shonekan, resurfaced again when the debate started about whether Nigeria should accept the conditionalities proposed by the International Monetary Fund, IMF, which meant to devalue the currency. President Babangida, took the advice of the “technocrats” while at the same time pretending that the Structural Adjustment Programme, SAP, forcefully imposed on the people was “home-grown”. On the eve of SAP, the exchange rate was N0.70/US$1. The prices of Volkswagen (people’s car) and Peugeot 504 (middle class car) were N6,000 and N15,000 respectively.
A week after SAP was announced as official policy, Volks and 504 escalated to N25,000 and N48,500 respectively. And that was only the beginning. By the time Peugeot Automobile Nigeria (PAN) Limited discontinued assembling 504, the price had been catapulted to N2.7 million. SAP in effect brought about the “Tokunboh economy” – which remains till today. Millions of middle class citizens bought their last new car or television or refrigerator after that.
Then, as now, SAP was sold with the promise that the pains of adjustment will be temporary; while the gains (diversified economy, export promotion, more employment, improved infrastructure etc) will be sustainable. The pains remain enduring; the gains proved elusive. Was President Jonathan in outer space when all these were happening or has he simply chosen selective remembrance and forgetfulness as a mental shield?
And, lastly for now, could the President of Nigeria have forgotten about the $13-16 billion illegally taken by President Obasanjo to increase power supply to 10,000 MW, according to Engineer Lyel Imoke – his Minister for Power? The money has, as usual, vanished; power supply remains steady at under 4,000 MW – same as since May 1999.
Given the track record of governments, how on earth can this President expect the people to believe what he promises –especially when his own personal record of keeping promises is dismal?…..
WHY ARE “PROGRESSIVES” COMPLAINING? –1
“Those who make a pact with the devil end up in hell”.
Adolf Hitler, 1889-1945.
Action Congress of Nigeria, ACN, had its own presidential candidate for the 2011 elections. The party called out the votes, in the Southwest, for every other office and won handsomely. Then rumours, which turned out to be partly factual, had it that an agreement was reached to allow Jonathan to “capture” the zone. Well, he is President. And he has taken the whip to the “progressives”; their leaders, supporters and media. …
REMEMBER $1.76b was reduced to under $450m in a few months in 2006. Till today, nobody has told Nigerians what happened to the money. They want to remove “subsidy” instead of catching the crooks. No Wikileaks. This is DeleLeaksRead the book. Only N5,000 per copy.
WHY ARE “PROGRESSIVES” COMPLAINING? –2
“History never repeats itself; man does”.
Barbara Tuchmann, US historian, authority on 14th Century Europe.
Monday, after 2011 Presidential