Mementos of a Marauding Messiah

The Government of Nigeria is it at again. The Central Bank is talking about an impending devaluation of our already valueless currency.Tthe dollar is already revving up to fly from it’s hitherto steady exchange rate of under 160 naira. The energy sector has once again been thrown into a head spin by the plans and utterances of The President and elements in his government. Another season of confusion, despondence, and pain is about to descend up us. Be ready for fuel queues to reappear.

Devaluation of the Naira

What is the purpose of devaluing a currency? A currency is devalued so that it becomes more enticing for countries importing goods and services from the country with the devalued currency to buy more because the cost of those goods are cheaper. It also means the country with the devalued currency buys from abroad at a higher price. Let us apply the above to Nigeria. We don’t have a production culture that is anywhere close to what will make us gain plenty foreign exchange from exportation. We are not a production economy, we stand to gain almost nothing from devaluation and there is nothing apart from oil to buy from us. Considering the fact that we import almost everything, from cars to refined petroleum products, to even the things people in our Government utter, devaluation simply means we will have to pay more to live. This brings a question to mind. Why is the Government in such a hurry to “remove” petroleum subsidy and devalue the Naira? Why not wait for electricity to become uninterrupted and the rail system become a reality, so that industries can kick into life and create more jobs and at the same time create an avenue for us to begin to export, albeit cheaply? Wouldn’t that be what a wise nation led by a wise President will do? Infrastructure that will make us benefit from structural adjustment is not yet in place, but economic decisions that are supposed to happen after it are already been fabricated. A case of putting the cart before the horse.

Removal of Oil Subsidy

When the government grudgingly announced the increased minimum wage, far-seeing people and skeptics of the sincerity of the government of the day quickly sensed that they will sooner come back with a counter announcement that will empty the pockets of the masses of the extra coins salary increase has given to them. In Nigeria, as I have come to realize, “removal of oil subsidy”, a term that has been in play since the days of the evil genius himself, IBB, simply means “increase in pump price of refined petroleum products”. This circus has been played out severally since 1988. Now the GEJ government is gearing to take its place in this ignoble act of milking its masses.

It is a well known fact that any slight increase in the cost of petroleum products will have a ripple effect across the economy, the cost of every good and service will move in the direction of an increase, and the so called palliative (in the form of an increased minimum wage) to a high cost of living will immediately come to nought. There is also the comment by the respected Economist, Professor Sam Aluko who maintained that there was no oil subsidy to be removed in reality, just a government trying to deceive its people.

Proponents of the subsidy removal claim it will encourage private investors to come in and build refineries. How much will it cost this government to build a refinery, and in so doing etch it’s name in gold in the history of Nigeria? According to an article by Dr. Mobolaji E. Aluko in 2003, it will cost $500 million USD to build a 100,000 bpd refinery (this was when it was still $1= 125 naira), and according to Saudi Aramco, it will cost $4 billion USD to build a 400,000 bpd refinery. In the short term, the government of Nigeria can build small capacity refineries while the higher capacity ones are built over a longer period of time. It is an investment that the government need not see as a favour to us.

The House of Assembly can easily make allowance for building such in the budget over time. My question is thus, what stops the Federal Government of Nigeria from building new refineries? Considering the fact the oil is the mainstay of our economy, isn’t it an issue of National security that the Government is willing to hand custody of the mechanics of this mainstay to private hands? What if an enemy force infiltrates them and grounds the economy, and ground us? This might seem far-fetched, but very possible. Some others have pointed out that fuel goes for much higher overseas. This is the same propaganda BS we have been listening to since someone discovered the miracle of “oil subsidy removal”. What if petrol goes for the equivalent of 350 naira in the UK? Is the UK in the top 5 of OPEC oil exporting nations? Why should a country that is blessed with a mineral resource that other countries shed blood to get have to suffer in the midst of plenty? Why should Nigerians buy petroleum products at global rates? Is this what is obtainable in Saudi Arabia, Kuwait, Iran, or Libya? (Since we are doing a global comparison). Below is a table showing how much in Naira Petrol costs in the top 4 OPEC member nations (Nigeria sits at number 5):

Source: Daily News Global

The table above shows that other top OPEC exporting nations have deemed it fit for their citizens to benefit from the resources of their land. With the impending increase that will come out of the “removal of subsidy”, Nigeria will shoot close to what it costs in countries that depend on the likes of OPEC for their supply, we might begin to buy Petrol at close to 250 naira per litre. Don’t even talk of diesel, that might become only purchasable with a vial of human blood. If eventually this private investors/ players are brought in, who would they be? Fronts and allies of the Government, who are after nothing but raping us and raping our commonwealth in a bid to enrich themselves even further. It isn’t shrouded in secrecy why successive governments have refused to make the refineries work, or build new ones. We hear of Nigerians owning refineries in other lands. These are the same people who buy, or bunker our crude illegally, take them overseas to their own refineries, and then sell the refined products back to us at global prices. Looks like they are not content with what they are currently getting – they are back to blackmail us in other to get more.

In Conclusion

The Government of Dr. Goodluck Ebele Jonathan continues to exhibit a lack of vision, control, focus, and insincerity to the people that queued up in the blazing sun to vote him in, to the innocent bloods that were shed during and after the elections. It is putting the interests of global financial forces (the IMF and World Bank) and local charlatans above the interests of its immediate constituency, the masses of Nigeria. Many voted GEJ because they thought he was one of them, that he understands the hardship of being the downtrodden, that he will never do anything to plunge them into unnecessary hardship while also overseeing the task of developing infrastructure, making electricity constant, and providing jobs. This isn’t what is happening, in my opinion, we instead are faced with an innocent looking marauding messiah who keeps leaving us signs of how bad he will get, armed with an army of sycophants and propagandists.

We should all put aside our political leanings and face the reality that is before us. The fact that someone is a sycophant of the Government of the day does not mean he will buy fuel, food, or electricity at a cheaper price than the man who isn’t a supporter, we all buy from the same markets. I don’t know of any special subvention, or aid that the Government is giving to supporters of any political party to make them cope better than the rest of the nation, we are all in this mess together. We haven’t found our messiah yet, and the journey in search of the promised land, like that of the Israelites in the desert, continues. Either we get weak and drop dead or not, we must get there.

October 10, 2011 | Categories: National Issues, Politics | Tags: devaluation, GEJ, Jonathan, messiah, naira, Oil, subsidy | 12 Comments