Nigeria: The Worst And Most Inhuman Subsidy!

The person principally in charge of the Nigerian economy, former World Bank Managing Director Dr. Ngozi Okonjo-Iweala yesterday at a public forum to discuss the challenges facing the Nigerian economy looked overwhelmed and at times confused as she battled hard to answer a few questions even as she adroitly avoided answering some others.
Dr. Okonjo-Iweala is Nigeria’s Minister of Finance and the Coordinating Minister of the Economy now expectedly referred to as the CME by a political class easily obsessed with slogans and acronyms. One of the questions Dr. Okonjo-Iweala avoided is the idea behind this piece. She could not explain the rationale behind the mind boggling and abnormal budgetary allocations to essentially guarantee a life of luxury to the ruling class.
Reading Nigeria’s budget is nothing different from reading a book containing the sharing formula for politicians and political office holders. It cost Nigerians about N1.3 trillion ($8.3 billion) to pay the salaries and allowances of political office holders. As a way of understanding this sum, N1.147 trillion ($7.4 billion) was ear marked for capital projects this year. Of this sum, just about half was truly spent which translates to the fact that, for every dollar the Nigerian government spends in developing capital infrastructure, two dollars are committed to paying the salaries of public office holders that have at best proved incompetent at bringing one of Africa’s biggest economies from the doldrums of economic failure.
This is not the sad part of the tale if you think that is sad enough. Do you know how this waste is funded? From borrowings! A total of $1.712 billion estimated at N265.36 billion is coming from countries such as India, China and France while the government is also expecting to wriggle out N794 billion ($5.1 billion) from the domestic market, bringing total borrowings for funding of fiscal 2012 at N1.059 trillion ($6.8billion). The Federal Government spending proposal for 2012 laid before the National Assembly by Nigeria’s President Goodluck Jonathan is N4.7 trillion ($30.3 billion).

Coupled with this, the government is also expecting to borrow another N600 billion ($3.9billion) from the capital market to refinance matured loans.

Apart from the cost of borrowing, note that the bulk of these borrowings are spent essentially to subsidise, in fact to cater for the entire means of life of public service holders. The Nigerian system guarantees the payment of medical expenses of public service holders. These are monies paid to Egyptian, Indian, German and other hospitals across the world. Like the Governor of the Central Bank admitted at the same event, government officials do not pay to fuel their cars. The same way they have no idea what it cost to feed a family or even pay for other rents. Their entire means of livelihood is paid for by the taxes of a people who are increasingly poorer by the day.
In 2009, Nigerian legislators received a total of N102.8 billion ($663.2 million) comprising “just” N11.8 billion ($76.1million) as salaries and a whopping N90.96 billion ($586.8 million) as allowances. The import of this gross disparity between salaries and allowances allows for just about 11% of their take home to be taxed. It would be fair to say they don’t even pay taxes to the people they so milk without regret. By comparison, let us compare the take home of probably the busiest public official in the world and Nigeria’s Senate President who is on holiday about a quarter of the year. Sourced figures indicate that the Nigeria Senate President has a total annual package amounting to N560million ($3.6million) compared to Barak Obama’s $400,000 (N62 million) as the President of the United States. Note that of Obama’s pay, $350,000 (almost 90 per cent) of that amount is taxed while just about 11 per cent of Nigeria’s senate president’s pay is taxed. The picture gets grimmer when you realise that it would take one Nigerian senator’s pay to pay the salaries of six American law makers. Compared to Nigeria lawmakers, Ghanaian parliamentarians are paupers!

The recent 2012 budget proposal provides a daily meal package of about N2.4 million/day for the president and his vice. There are also provisions to get special cars each worth N280million ($1.8million) for the president and his vice. Out of all of these, Nigerians remain poor and compared to their rulers they look absolutely inconsequential in the scheme of payments. An average UK worker earns about 22 per cent of the pay of UK parliamentarians, an average French worker earns about 27 per cent of the pay of their lawmakers, an average Nigerian worker earns 0.13 per cent of the lawmakers’ pay. In essence they earn zilch compared to their lawmakers!
This is the foundation the Nigerian economy is built on. We have seen that apart from the obvious haemorrhage on the economy by corrupt public officials, besides the pains resulting from economic restrictions and shoddy economic decisions, Nigerians are forced to borrow to maintain the lives of their rulers.  
Nigeria of course cannot continue to subsidise the existence of its public office holders. Something has to give. If this is allowed to continue, Nigeria will go down and there will be no EU or US to bail her out. One debtor cannot bail out the other.
Action: Reduce the pay of all public officials by at least 70 per cent. This still leaves them as amongst the highest earners in the world. Nigeria would save about $500 million/year from its lawmakers alone if this is done.
Stop the barefaced corruption called “Security votes” allocated to Governors to do whatever they deem fit.
If all else fail, resign enmasse!
J Japheth-Omojuwa writes on http://www.omojuwa.com/ and he is the editor of http://www.africanliberty.org/
Email write@africanliberty.org

ANOTHER SAD MOMENT FOR OUR EDUCATIONAL SYSTEM

Please permit me space in your widely read medium to air my modest view on the ongoing strike embarked upon by the Academic Union of Nigerian Universities.  ASUU’s reason for embarking on this industrial action stems from the poor implementation of the 2009 agreement entered into between it and the federal government. Its contention is that government has abandoned salient clauses in the said agreement. Therefore paralyzing academic activities in our Ivory Towers becomes a suitable means of drawing government’s attention to those salient clauses.

That the Nigerian educational system has been in shambles is no longer new. All levels in our educational system lay in a decrepit state. A visit to some of our schools especially our universities, reveals the decrepit state of our education. What you will find are old dilapidated structures, poor lecture theaters, poor or a complete absence of laboratories for research purpose, obsolete books in the libraries and inadequate accommodation space for our increasing number of students.  There is indeed no gain saying that our educational system yearns for urgent reforms.

This unfortunate state of our universities raises a lot of question about government’s readiness and commitment to the educational sector. Why has government allowed our educational sector to degenerate to this level, is education less important that government will relegate it to the background, where was government while our educational system continued to plunge into total collapse and what benefit will the country from frequent disruption in the academic calendar of universities? Are the emoluments of politicians more important than the future of a country? The noise I am used to hearing when a particular matter affects the welfare of our politicians seems to have abated now that it affects our education.

These strikes have no mean effect on our youths, majority of who are students. A lot of them have been made to put in longer years more than required for their course of study. They become frustrated and tired with the entire system. Need I remind us that when frustration creeps into the mind, revolt against the system begins to receive attention? And we all know the effects of such revolts, which I will not mention here. It is common knowledge that no nation progresses without a solid educational system. Government must therefore pay maximum attention to this sector.  Our dream of becoming a top economy in the future will remain only a dream unless there is a significant channeling of resources into the sectors that will lead us there. And education is one of them. I expect government to at least dedicate 30% of her budget to education.

To members of ASUU, I salute your courage and determination towards ensuring that our universities are reformed to international standards. But you must also note that your fight is not a personal one. It is for the future of the country and our youths your students. Their lives have not being helped in positive any way by these strike actions. For instance, ASUU has embarked on strike for the same issue since 2008. I want to ask on behalf of our students, is there no better option to strike? ASUU should in my view appraise other options because strike does not seem a have an effect on government’s recalcitrance. God bless Nigeria.

                                                                                                                Frank O. ijege

                                                                                                                8 Madaki Crescent, Narayi Kaduna

                                                                                                                frankijege@yahoo.com, 08032093229

REMOVAL OF FUEL SUBSIDY, AN AFFRONT ON THE PEOPLE

Events in recent times have not ceased to astound me.  In the face of the enormous challenges that Nigerians face, government still chose to exercise a blind eye, and is seeking to worsen the already sorry situation of the people. Why is it that despite all the pressing issues craving for government’s attention, the one she chose to court, is that of the removal of fuel subsidy, an option that is clearly against the interest of the people?

Isn’t it very shameful that after over five decades of discovering oil in commercial quantity, Nigeria our dear country is still importing refined petroleum into the country? We have been importing these products for over forty years. Yet it does not taste sour it the mouth of Mr. President to say that Nigeria will collapse if fuel subsidy is not removed. If after over fifty years of the discovery of oil, Nigeria still imports the refined product, then I think it is utterly disgusting and shameful. It means our leaders have not paid attention on the need to develop Nigeria. Their attention may have been on how to enrich themselves at the expense of the generality of the people. We all have seen how our politicians who lived in penury become multi millionaires upon attaining political. They accumulate this wealth, while the fortunes of the country continue to dwindle under their watch. Of course, they care less because all that matter is their pocket.

The President presented a budget to the National Assembly on the 13/12/2011, without making provision for subsidy. That singular act is a declaration of war on poor Nigerian masses. It is obvious that Mr. President and his team are ready for a confrontation with the people. I can assure him that the people will not just fold their arms and allow government mess up their lives through ill conceived policies. May be someone should remind Mr. Jonathan that it is almost five months since the inception of his administration, he is however yet to implement any of his campaign promises. I hasten to add also that the removal of fuel subsidy was never a part of his campaign promises. So where he got it from, don’t ask me. Or did he just fool Nigerians in order to win the April Elections?

His retinue of advisers must have underestimated the capability and capacity of Nigerians to fight any anti people policy by of government. I have indeed heard the Minister of Information, Mr. Labaran Maku make a statement, to the fact that the North African revolution cannot happen in Nigeria. My modest response is simply this, such a statement is laughable. If they think this is in the affirmative, then let them go ahead and dare the people by removing fuel subsidy. I have this inkling that our leaders forget that power belongs to the people. However, I am least surprised by their seeming ignorance. Because Nigerians, we have slept on our rights for too long. We must therefore awake from our protracted slumber and seek to protect our interests.

If Mr. President doesn’t have anything to offer Nigerians, let him engage in wide community consultations so that the people can school him on what they want government to do for them.  Removal of fuel subsidy is not the best decision, because this would merely pitch the government against the people. And government cannot withstand the wrath of the people. One had honestly expected the President to think about building more refineries and getting the current ones that lay in a comatose state, to work. Unfortunately however, the President is thinking otherwise.

Suffice to ask at this point, who will the benefit most from this removal of fuel subsidy? It most certainly cannot be the poor masses of Nigeria who toil day and night yet, they still live below a dollar per day. It must therefore be in the interest of the cronies of Mr. President, those who financed his campaigns. That is the only way he can pay them back. I dare say here that exploitation is not the best way to pay back a debt. 

The so called removal of fuel subsidy is evil, anti people and an affront on the people of Nigeria. We must therefore collectively resist and fight it. I call on all well meaning Nigerians to resist this move by the government. It is anything but in the interest of Nigerians. God bless Nigeria