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| A president in dilema - President Jonathan of Nigeria |
Nigerians are protesting because the price of petrol at the pump in their country has been more than doubled by the Nigerian government. Before January 1 this year, Nigerians bought petrol at N65 ($0.40) a litre but now it has been increased to about N150 a litre ($93). Tens of thousands of people took to the streets and staged strikes for five successive days last week in protest against the removal of the fuel subsidy. Most shops, offices, schools and petrol stations around the country have been closed.
WHAT HAPPENED BEFORE THEN?
Last year President Jonathan made a few high profile connections with the world community last year. In June he met up with the US President Obama; then he welcomed the US Army Chief, the commander of the United States Africa Command (AFRICOM), General Carter F. Ham into the country (on grounds of terrorist threats). In November, the president warned Nigerians that the government would hike the price of petrol. He said the price hike would take effect from April 2012.
In December, the IMF chief Lagarde visited Nigeria and hailed Jonathan reform plans.
On 1 January 2012, four months earlier than anticipated, President Jonathan announced an immediate removal of the fuel subsidy which has double fuel prices.
WHY HAS THE FUEL PRICE DOUBLED?
Nigeria is Africa's biggest oil exporter so the country gets loads of money from it. But Nigerians claim that the money has been mismanaged over the years by corrupt leaders. So, although, Nigeria sells millions of barrels of crude oil (which is an unrefined type of oil) to the US, UK and other European countries, these super power countries are stopping Nigerian leaders from refining their own oil. These countries are not just prepared to pay more for the refined oil especially with the recession in their countries. So, they have made deals with the Nigerian government by giving them loans from the IMF, NGO funding, various forms of food and military aid or protection in exchange for selling a cheaper type of oil. Now, Nigeria imports over 75% of the refined oil (petrol and gas) it needs at home at a higher price from the same countries who bought the crude oil for less. These countries extract the oil from oil wells in the Delta area of Nigeria and ship then away for refining then sell them to the Nigerian government at a higher price. This price is too high for the ordinary Nigerian so the Nigerian government offers a subsidy.
WHY IS THE FUEL SUSIDY A PROBLEM?
Many Nigerians believe that over the years the governments have mismanaged the oil money. They know there is a lot of money moving around but they have no idea how much it really is and where it is going to or coming from. Thousands of Nigerians becoming billionaires everyday but in a country of 160 million people where over 70% of the population lives on less than a $ a day, the inequality is widening at an alarming rate. Nigerians, therefore, want to know exactly how many barrels the country produces every day, who is buying and selling the oil, how much is the revenue from oil each day, how the revenue is spent. In short, Nigerians want to have a say in a resource which belongs to all Nigerians. So, what Nigerians are saying is that if there has always been a subsidy, where has the money used to subsidize the oil come from? Secondly, if the 'subsidy' is removed, where would the money go to? Lastly, how much is the subsidy, if there was one?
WHAT HAS NGOZI IWEALA GOT TO DO WITH THIS?
Nigerian's President Jonathan Goodluck appointed Ngozi Iweala, former Managing Director of World Bank (October 2007 - July 2011) and Harvard university PhD holder to his cabinet as the Finance minister to tighten up the economy. Nigerians especially the southerners hailed her as an intelligent lady with a broad international finance experience. However, since her appointment, Nigerians believe she has collided with her former colleagues at the World Bank and the IMF. They clain that she has implemented harsh IMF inspired agendas and policies. Also, many Nigerians claim the western world does not want Nigeria to develop so that they can continue buying oil and other resources cheaply and selling the refined products back to us at higher prices - so high that most of the population cannot buy then we can be more reliant on unwanted cheaply produced but highly priced products from the west.
WHAT HAS IMF GOT TO DO WITH THIS?
According to the IMF, Nigeria's economy was improving and the standard of living of most Nigerians improved compared to the 1990s. Growth forecasts were 9 percent for 2011 to 2013. Then suddenly they said the country had to make re-adjustments because of the failing global economy. Some Nigerians believe that the IMF which is made up of USA, UK and Europe think tanks want to pass on the debt in the countries to Africa. So, the west will buy oil cheaply and sell high back to Nigeria and this will kick start their economy. For example, the UK sells petrol at the pump in London for £1.35 a litre. Here is how UK petrol price is made up: Duty - £0.58; Tax - £0.22p; Delivery - £0.5p; Price of petrol - £0.47p which is about N125. So, if the price of refined petrol imported from Bonny in Nigeria is £0.47p which is N125 why should the government of Nigeria, the largest producer of oil in Africa enforce Nigerians to pay more that what it costs in UK.
WHAT OTHER DEMANDS HAVE THE PEOPLE MADE?
Many Nigerian unions have insisted that the oil price should go back to N65 (40.40) or they would shut down the oil refineries and rigs. This will bring a lot of disruption to business in the western world countries that rely on oil from Nigeria. It will also help raise the price of crude oil. Also, Nigerians are insisting on a better country altogether - higher standards of living. Nigeria depends on oil for 80% of its state revenues and Nigerians claim there is not much to show for it. They are demanding for good roads, a good transportation system, better health and education facilities. The mortality rate in Nigeria is very high and many children die and life expectancy is about 59. Over 70% of the population lives on below $1 a day. Over 75% of Nigerians do not have stable electricity, 69% of the population cannot read or write and 73% have no access too clean water or basic health care according to statistics from globalissues.org. Nigerians just want a better life for themselves and for future generations. They want to be proud of their country.
WHAT HAS THE PRESIDENT SAID?
The Nigerian President Goodluck Jonathan, who announced the move on 1 January, says it will save billions of dollars which can then be put into public services. This weekend have met with the president but have so far failed to reach a compromise over government-subsidised fuel prices, but the unions notably PENGASSEN the oil union have now said oil workers would not shut down crude output while the two sides kept talking. But the union has said that it would shut down production immediately if talks broke down.
CAN A UNION SHUT DOWN OIL PRODUCTION IN A COUNTRY?
Although, industry officials doubt unions can stop crude oil exports completely because production is largely automated and Nigeria has crude stored in reserves, but even a minor outage could have a significant impact on the economy.
Tankers form UK and US oil refinery companies have been unable to deliver supplies to Nigeria and even if oil output stayed in place, the strikes were costing Nigeria, Africa's second-biggest economy around $600 million a day.
HOW HAS THIS AFFECTED ORDINARY PEOPLE?
Well, Nigerians an enterprising people have found ways to make some money from the crisis. Some bought and stored petrol throughout the week before the strikes began and are now reselling for huge gains. Food and drink hawkers have had a bonanza sale due to the large turn out on the streets all over the country. Pick pockets and petty thieves would have also made some gains. The people who are most affected are those who genuinely had to protest because of the terrible conditions of their lives.
For example, transport providers have been ordered by the government to keep fares the same although the cost of petrol has double. This means that families where the main bread winner works in a transport company will struggle to eat, pay for housing, travel to work or school.
Nigerians who can afford petrol buy it not only for their vehicles but also for their generators which are switched on for 20 hours each day. The amount of money spent on the petrol Nigerians buy for their generators to power their homes is a significant proportion of their disposable income.
Food, education and healthcare are also beyond the means on most people. Many Nigerians walk for up to two hours every day to get to work and back nome. Babies, children and nursing mother suffer severe hardship and the poluted air doesn't help. Living in Nigeria is expensive.
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