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Monday, October 10, 2005
The President's October 1 speech
PRESIDENT Olusegun Obasanjo in his Independence Day national address said that stakeholders in the fuel-producing sector have been "directed" to ensure the stability of the current price for the next 12 months or so. In his words: "... government has directed PPPRA, NNPC and other stakeholders to work out the modulator mechanism that will maintain and sustain current pump price level until the end of 2006 no matter what happens in the international oil market".
Like one who speaks from both sides of the mouth, government has decreed a price regime contrary to its economic reforms which are so much touted as underpinned by the supreme rule of market forces. However, by admitting its power to control fuel price through its agencies, government has at last redeemed itself of its self-denial. For it is a cardinal duty of government to intervene for social and economic reasons, in the pricing of key products such as energy.
It is a matter of relief that the public feeling, articulated by the Nigeria Labour Congress (NLC) in collaboration with civil society groups on this highly disagreeable matter, has yielded a response of sorts from the president. The President may indeed have listened to public opinion, but it does not seem that he clearly heard the call for price reduction. In this regard, one or two points need be made clear right away.
This response is no palliative for the fuel price-engendered impoverishment that most Nigerians suffer at present. Fuel is a macro product the price of which determines, literally, other prices in the economic system and even dictates in some ways, the nature of social relations. We refuse to believe that the president and his economic team are unable to appreciate this crucial and indisputable fact each time the decision is taken to raise prices.
The price modulation mechanism, neither original to its proposers nor indigenous in colouration, is actually a model borrowed from South Africa and proposed by the Senator Ibrahim Mantu-led 'Palliative Committee'. It may be appropriate for South Africa but not for Nigeria, the largest oil-producer in Africa and the seventh in the world. The truth is that the current price of N65.00 per litre is unjustifiably high in a country where about 70 per cent of the population survive on about N 150 or less a day, that is, below the universally defined poverty line. We insist that it is not enough to maintain the current price by whatever mechanism; the price of fuel in Nigeria should be drastically reduced to a level sensitive to the average standard of living and the income-generating capacity of the average citizen at this time.
The NNPC claims to subsidise the current consumption with N238 billion per annum. If verified and proved, this amount can certainly be underwritten from the Petroleum Profit Tax (PPT) paid by the oil companies. According to the Federal Inland Revenue Service, the Federal Government earned from this source alone, the sum of N878.6 billion last year, N402.99 billion in the first four months of this year. In the past five years ending April 2005, the PPT yielded a total of N2.680 trillion into the national purse. Besides, Nigeria earns far more from the sale of crude than it budgeted for.
This is not to deny the usefulness of market forces as a determinant of the prices of goods and services. But it is to say that government must constantly apply the wisdom to balance economic theory with practical reality - as do other nations that subsidise agricultural, petroleum or other products in the interest of their citizens. When President Obasanjo speaks of a moratorium on fuel price increases "until the end of 2006", is he in fact, suggesting that before his government leaves in 2007, there may be another rise in the prices of petroleum products? What economic argument justifies the moratorium that he proposes?
The fuel price issue was one of many things President Obasanjo examined in his October 1 speech. But the entire speech was long on platitude, pontification and riposte, and short on specific answers to key questions that agitate the mind of the citizenry. For example, it was loudly silent on 2007, even in the face of so much public speculations and concern? Is the unity of this country more assured than hitherto? The president thinks so, but we doubt it. Are we more productive, indeed, does the prevailing environment enable us? President Obasanjo opines so but this is debatable if the Manufacturers Association of Nigeria is to be believed. Is Nigeria a better place to live in today than say, five years ago? Our president chooses to so think. But the facts and the figures - which, in the absence of local statistics, come from the UNDP and other external sources - do not support this. He says he runs "a listening government". This is also contrary to what we know. If anything the government is not listening enough.
Most indices that measure the quality of life and human development show that conditions here are worsening. It is also regrettable that corruption is doing quite well partly in spite, and partly because, of the policies of government. We believe that in this final lap of his presidency, President Olusegun Obasanjo can, and should review his government's strategy to develop our country. The people, the most critical asset of any nation, must first be developed and empowered to ensure productivity and progress. And whenever the President addresses Nigerians, the least that he can do is to avoid the use of intemperate language. |
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