For over eight years, since I started writing a weekly column in this newspaper in 2014, I repeatedly called for the abolition of the fuel subsidy. It distorted the economy and fed massive corruption.
So, when, on his first day as president, Bola Tinubu scrapped the subsidy, I should be thrilled and excited. But, no, I wasn’t. Why?
Well, as a political economist, I know the dynamics and interplay between politics, economics, and institutions.
The right economic policy under the wrong political conditions or the wrong institutional process, will lack credibility and efficacy.
In policy making, there’s a distinction between substance and process: substance is “what to do”, that is, the nuts and bolts of a policy; process is “how to do it”.
How could Tinubu be “possessed with courage” to announce a policy with far-reaching consequences for ordinary citizens without adequate consultation, preparation and remedial measures?
Both must work in sync; otherwise, there’s a risk of failure. Tinubu broke the link between substance and process!
Tinubu went to his inauguration on May 29 without the intention to scrap the fuel subsidy from DAY ONE!
Rather, his prepared speech referred to “phasing out” the subsidy, in line with his manifesto, “Renewed Hope 2023”, which says on page 37: “We shall phase out the fuel subsidy.”
Indeed, the manifesto linked the removal of the oil subsidy to the Dangote refinery, saying: “By the time we took office, the Dangote refinery would have been fully operational, nullifying the need to import refined petroleum”, adding: “There will be no need for a subsidy because supply will come from local refineries.”
But, as at today, Nigeria is still importing refined petroleum. So, the preconditions set out in Tinubu’s manifesto for completing scrapping the fuel subsidy haven’t been met.
Yet, despite his prepared inauguration speech merely referring to “phasing out” the subsidy, Tinubu blurted out: “The fuel subsidy is gone.”
Later, during his recent trip to France, Tinubu told the Nigerian community in Paris what actually happened.
He said he did not discuss the automatic removal of the fuel subsidy with his aides before the inauguration and did not include it in his speech.
Then, he said: “When I got to the podium, I was possessed with courage, and I said subsidy is gone.”
Really? “Possessed with courage”?
What kind of courage possessed Tinubu to behave like an autocrat? In a democracy, the cause cannot simply excuse the leader and justify the means.
The fact that a cause is right doesn’t mean it can be pursued by just any means. How could Tinubu be “possessed with courage” to announce a policy with far-reaching consequences for ordinary citizens without adequate consultation, preparation and remedial measures? Such capriciousness is the stock-in-trade of dictatorships!
Now, let me repeat what I have said many times in this column. Even if the Supreme Court validates Tinubu’s election, his administration is a minority government.
He has the weakest mandate of any president since 1999, even ignoring the gaping credibility deficit of that mandate.
The overwhelming majority of the electorate, 63.39 per cent, did not vote for Tinubu. If he governs with arrogance, he will, sooner or later, find that merely satisfying constitutional technicalities are different from having a strong mandate and legitimacy.
In political economy, the mandate hypothesis says that a government has greater scope for big bang reforms if it won a strong mandate for change in an election.
Surely, running a minority government with a weak mandate, Tinubu must govern with humility and build genuine consultation and national consensus around critical reforms.
Ideally, he should form a broad-based national unity government. Unfortunately, he’s pursuing a Machiavellian, divide-and-rule strategy with Nyesom Wike’s fringe group, whose dubious contributions to his “victory” did not extend his votes beyond the disputed 8.8million out of 23.4million valid votes, meaning that 14.6 million, or 63.39 per cent, of the voters rejected him!
Yet, there’s another damaging political context. Recently, former President Muhammadu Buhari said he amended the Petroleum Industry Act 2021 and delayed the fuel subsidy removal “to allow Tinubu to win the election.”
Buhari said that if he had withdrawn the fuel subsidy, the “social consequences” would have lost Tinubu the election. “Polls after polls showed that the party would have been thrown out of office if the decision as envisaged by the new Petroleum Industry Act was made,” he said.
So, Buhari manipulated the law and policy on fuel subsidy removal to “allow Tinubu to win the election”. But once Tinubu “won”, he was “possessed with courage” and spontaneously scrapped the subsidy, ignoring the social consequences that Buhari said would have cost him victory.
Essentially, if Buhari must be believed, Tinubu “won” the election on a deception, on a lie. That makes the whimsical arbitrariness of his autocratic decision to remove the fuel subsidy on his first day in office even more politically unacceptable. It’s a political fraud!
What about the crass hypocrisy? In her book Fighting Corruption Is Dangerous, Dr Ngozi Okonjo-Iweala, former Finance Minister, and current Director-General of the WTO, describes the visceral opposition to President Goodluck Jonathan’s plan to phase out the oil subsidies in 2012.
The opposition was led by Tinubu’s then party, Action Congress of Nigeria, ACN. In a recent article titled “Fuel subsidy and the God of Jonathan”, Dr Reuben Abati, then President Jonathan’s spokesperson, also described the viciousness the opposition, and referred to an article written by Tinubu in 2012 titled “Removal of oil subsidy: President Jonathan breaks social contract the people.”
In the article, published in his newspaper, The Nation, on January 11, 2012, Tinubu took a stance against the phasing out of the oil subsidies.
Yet now that Tinubu is in power and needs money for his administration, he’s consumed by a latter-day zeal to tackle the fuel subsidy. Such dishonesty, hypocrisy and opportunism would undermine the credibility of any policy, even the right economic policy.
But how far can Tinubu go? The fuel subsidy fraud became acutely endemic under the administration of President Buhari, who was the Minister of Petroleum during his two terms in office. Buhari certainly knew, but did nothing, about the subsidy scam.
In his recent widely publicised interview on Channels TV, former Governor Isa Yuguda of Bauchi State said that a friend of his in the oil industry told him that he told the president: “Mr President, please remove this subsidy. We are tired of making money!”
So, how far can Tinubu go? Can he go beyond scrapping the fuel subsidy and probe the subsidy racket to recover money from the oil scammers?
Unfortunately, Tinubu won’t be possessed with such courage! For, as David Pilling, Africa Editor of the Financial Times, wrote recently, “Tinubu has appeared to epitomise all that is wrong with Nigeria’s governing class.”
Recently, Tinubu said: “I could have asked for my share of the fuel subsidy, but that’s not why you elected me.” Consider his words: “My share of the fuel subsidy”.
Tinubu said he wasn’t elected president to benefit from the fuel subsidy, but was he elected governor to enrich himself from the resources of Lagos State through Alpha Beta, as alleged?
Even former President Olusegun Obasanjo couldn’t help asking recently: “Why did he set up Alpha Beta?”
Truth is, Tinubu simply lacks the credibility to be sanctimonious, and Nigerians must be watchful!
So, here’s the question: how would Tinubu account for the $10bn annual savings from the subsidy removal?
Recently, the World Bank said that “inflation has driven 4million Nigerians into poverty”. That’s in addition to the nearly 100million already in extreme poverty.
How would Tinubu tackle the social consequences of the subsidy removal? Surely, if he was possessed with courage to scrap the subsidy, he must be possessed with courage to deal with the social fallout!
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