A presidential gaffe

Last week, former President Muhammadu Buhari made claims about ending fuel subsidy; that must be subjected to the facts as we knew them under his watch. He said he delayed ending fuel subsidy so that his party, the All Progressives Congress (APC), would win the 2023 general elections. I think it would be more correct […]

Last week, former President Muhammadu Buhari made claims about ending fuel subsidy; that must be subjected to the facts as we knew them under his watch. He said he delayed ending fuel subsidy so that his party, the All Progressives Congress (APC), would win the 2023 general elections.

I think it would be more correct to say that his guts and gumption failed him when he needed them most. And for eight years in office, he thrashed about one of the national challenges he promised to take on and defeat during his tenure. In the end, it defeated him too. His passing the buck to his successor cannot, with the best will in the world, be accepted as his calculated decision to save his party from being drubbed at the polls. Fuel subsidy removal was never primarily about winning an election. It has always been about the proper management of the economy. His statement was a gaffe.

Let me remind the former president that even before he assumed office in 2015, he was critical of the fuel subsidy regime and promised to end what he believed was fraud perpetrated by the combined forces of government officials and private businessmen at the expense of the country and its people. On his assumption of office, Buhari announced that the fuel subsidy had come to an end. In my column in response to this act of courage, I applauded him.

My applause turned out to be the height of naivety. It was found out a few months later that the president had taken refuge in the opacity that had characterised the administration of the fuel regime. Fuel subsidy was alive and well. The federal government misled the people.

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The opacity in the administration of the fuel subsidy pushed every administration to bend the facts any way to make it look good in the estimation of the people. But every federal administration knew, as I pointed out elsewhere, that “the subsidy regime was riddled with corruption. Ending it would mean closing one avenue through which unscrupulous Nigerians, through no fault of theirs, bleed the country.” All rats still fear to bell the cat. The consequence is existential.

The unwillingness of successive administrations to end it had to do with the hold of the oil cartel on the jugular vein of every federal administration. No one should be uncharitable enough to suggest that dismantling the well-serviced network operated by the private sector in cahoots with the public sector. It was a complex system of fraud and corruption.

The Buhari administration had problems with, to quote a Daily Trust editorial, coming “clean on fuel subsidy.” It buried fuel subsidy under a new bureaucratic sophistry called “under recovery.” This was intended to mislead the people into believing that the subsidy regime had ended. But under the new policy, according to the Daily Trust editorial under reference, “it diverts some proceeds from the sale of crude abroad to finance the import of refined fuel for domestic need, which in turn sells at a fixed price to marketers.”

For years, the International Monetary  Fund (IMF) and the World Bank repeatedly advised successive federal administrations to end the subsidy regime and allow the people to contend with market forces. And for years, every federal administration refused to act. In 2019, the former managing director of the World Bank, Mrs Christine Lagarde, again told Buhari to end the fuel subsidy regime and spend what it saved from it on health, education and infrastructure.

She put it rather indelicately when she said that, “As far as Nigeria is concerned, with the low revenue mobilisation that exists in the country, in terms of tax to gross domestic product (GDP), Nigeria is among the lowest. A real effort has to be made in order to maintain a good public finance situation in the country.”

Buhari failed to act.

At a workshop organised by the office of the Accountant-General of the Federation in Kano sometime in June 2018, the then Emir Muhammadu Sanusi II advised the federal government, for the nth time, to end the subsidy regime. He said that in 2011 when he was the governor of the Central Bank of Nigeria, Nigeria earned $16billion from crude oil. According to him, “We spent $8bn importing petroleum and spent another $8.2bn subsidising the product. And I asked, “Is this sustainable?”

Sanusi said that “the country is bankrupt” and was forced “to sacrifice education, health and infrastructure for us to have cheap petroleum.” The fact that Nigeria is the poverty capital of the world is proof enough. Buhari ignored the experts.

The former Minister of Information and Culture, Alhaji Lai Mohammed, said at the time that in the last 14 years Nigeria spent a tidy N10.413trillion on fuel subsidy.

The manipulation of fuel supply in which the importers induced artificial scarcity and forced us to pay much more than the official price at the black-market rate made nonsense of the so-called official price set each time by the government. I thought we ought to have decided long before now the rationale for running the hybrid system of capitalism and a poorly thought-out welfare system, which leaves everyone confused.

Certainly, if the government had ploughed the N10.413trn that served the fuel importers and the corrupt system well but the people not at all, into education, health, and infrastructure, it could have made some difference in those very vital sectors. It seems to me that if we pay more attention to the near-criminal wastage of our common resources, we could have a better rating on the global poverty scale than we do now. Our poverty is not a product of the red ink in the accounts of the governments. It is a product of a network of systems that have served smart individuals more than the country and its people.

In his 2018 new year message, Buhari said, “Our government’s watch word and policy thrust is change. We must change our way of doing things or we will stagnate and be left behind in the race to lift our people out of poverty…”

He announced that subsidy regime had ended that year. It did not. Then again in August 2020, the federal government announced that fuel subsidy would end in December that year. Except that once more it did not. It was pushed to the end of May 2023 when the Buhari administration would no longer be in office. Buhari did not end fuel subsidy. He did not act to save his party from electoral defeat. He imposed on his successor in office the burden he failed to discharge as a promise to the people. For him to celebrate it as an achievement is to give achievement a poor image.

Tinubu ended it because he chose to bite the bullet rather than continue to dance around what has for so many years held the country’s development hostage. Just as Buhari feared that it could have cost his party the election, Tinubu too could have failed to act because it could define his regime as anti-people and create monumental social, economic, and political problems for him so early in the life of his administration. Let’s grit our teeth and weather the current difficulties post the end of the fuel subsidy regime. We are paying the price of past indecisions.