I have to applaud President Goodluck Jonathan for taking a bold step in reducing the price of petrol from N150 to N97 and I have to congratulate the Nigerian Labour Congress (NLC) for being open minded and being ready to compromise as well. Well Mr. President you know that people are still out there clamoring for N65/L so you still have some convincing to do. You just took the first step and we hope you will be brave enough to carry out the other steps necessary to secure the future of Nigeria.
One of several things that can be done to help you implement the gradual phase-out of the fuel subsidy is for your team to publish what you pay each major oil importer, when and the quantity of fuel they are receiving payment for. In addition, the fuel importers should be required to publish how much they distribute to wholesalers and retailers to the last litre with the delivery schedule. Why is this a good idea you may ask?
Implementation of the previous subsidy as we knew it had various problems so of which were diversion of fuel to neighboring countries, hoarding of fuel and the Big Elephant in the room, Lack of Transparency, just to name a few, which could be worsened by a phasing out strategy for the fuel subsidy. The new fuel subsidy regime/system described above will hopefully reduce the abuses that plagued the administration of the former fuel subsidy regime by opening up the books for all to see. It's really about Transparency and Accountability, two things that the Nigerian people are yearning for.
Mr. President please continue to take Bold Steps necessary to secure Nigeria's future.
Monday, January 16, 2012
Friday, January 13, 2012
Pointers for President Goodluck Jonathan and the Govt. Team and Organized Labour
I received various comments on my posting "Open Letter to President Goodluck Ebule Jonathan on the Subject of Fuel Subsidy Removal January 9, 2012" on the Blog and on Facebook and I have responded to some of them already. As I expected some were pro subsidy removal and others against, that is the beauty of debate and I hope this continues both in public and private as Organized Labour and the Federal Government negotiate on a compromise in the next few days.
Advice to Mr. President and his team
1. It is clear that you and your team are having trouble with the fuel sudsidy removal partially due to a failure to communicate clearly your plan with the Nigerian people. You will need to focus some resources on communicating the impetus behind the policy change the coping mechanisms you will put in place and the benefits that will accure to the Nigerian people while at the same time pointing out the short term costs that Nigerians should expect. Sir, Nigerians are adults and if we have the FULL information we can make a better informed decision on any matter including the fuel subsidy removal.
2. You should have put in place some coping mechanisms in place before removal of the fuel subsidy e.g improve public transportation and subsidize that for the common man or transport vouchers as someone commented. If you want me to swallow a bitter pill of N150 per litre petrol, the least you can do is to soften the blow. I don't know if it is too late but the 1600 buses you provided is a start and it may take more like 16000 to make a dent but it should be done systematically. This is an opportunity to work with various State and LGA governments to work on building the foundation for MASS Public Transit.
3. Very few Nigerians believe your government will utilize the savings from the the removal of the fuel subsidy judiciously. All I have heard from your team is that the money will be used to boost infrastructure. What infrastructure? Roads? Ports? Airports? Schools? Hospitals? Again due to a failure of communication I myself am very skeptical that the savings will be used well.
Sir, you should develop a website that details all things fuel subsidy removal. It can be one platform for engagement with the Nigerian people amongst others. You should put all information pertaining to fuel subsidy removal and your plans there so that any Nigerian who wants to see a blow-by-blow action plan and monitor implementation should be able to do so including journalist who can spread the word to a wider audience. Madam Ngozi Okonjo-Iweala did several things well in her first stint as Minister of Finance, one of which was publishing what was distributed to State Governments every month in Nigerian dailies, you should publish how much from the fuel subsidy savings have been used and for what projects on a weekly/monthly basis and provide the copies of the winning bids for all to evaluate.
Sir All Nigerians including both rich and poor, believe that the fuel subidy is our right for better or worst. Removing it is akin to placing a tax on us and when one pays taxes they are entitled to see what their tax Nairas are buying. So we the Nigerian people are saying we are entitled to see what the fuel subsidy removal savings are buying. The closer to real time you can make this information available the better.
Sir I have many more observations but I will limit it to three for now so you can digest it well. Goodluck with the Negotiations!!!
Advice to Comrades of Organized Labour
My sister was a deputy Labour leader in Nasarawa State so I understand the pressures on you to get the best deal from the Federal Government.
I just want to admonish you to go in with an open mind with no preconditions and think of alternative scenarios where you will be able to walk away satisfied without the President reverting to N65 per litre price. An example is that all States implement the N18,000 minmum wage.
Another option which I will advocate for long term engagement with the Government is the German approach where Organized Labour, Business and the Government work together to hammer out hard decisions together such as increasing the minimum wage or removal of subsidies be it fuel subsidy or fertilizer subsidy or application of subsidies such as education support etc.
I wish you the Best of Luck in your Negotiations with the Federal Government.
Advice to Mr. President and his team
1. It is clear that you and your team are having trouble with the fuel sudsidy removal partially due to a failure to communicate clearly your plan with the Nigerian people. You will need to focus some resources on communicating the impetus behind the policy change the coping mechanisms you will put in place and the benefits that will accure to the Nigerian people while at the same time pointing out the short term costs that Nigerians should expect. Sir, Nigerians are adults and if we have the FULL information we can make a better informed decision on any matter including the fuel subsidy removal.
2. You should have put in place some coping mechanisms in place before removal of the fuel subsidy e.g improve public transportation and subsidize that for the common man or transport vouchers as someone commented. If you want me to swallow a bitter pill of N150 per litre petrol, the least you can do is to soften the blow. I don't know if it is too late but the 1600 buses you provided is a start and it may take more like 16000 to make a dent but it should be done systematically. This is an opportunity to work with various State and LGA governments to work on building the foundation for MASS Public Transit.
3. Very few Nigerians believe your government will utilize the savings from the the removal of the fuel subsidy judiciously. All I have heard from your team is that the money will be used to boost infrastructure. What infrastructure? Roads? Ports? Airports? Schools? Hospitals? Again due to a failure of communication I myself am very skeptical that the savings will be used well.
Sir, you should develop a website that details all things fuel subsidy removal. It can be one platform for engagement with the Nigerian people amongst others. You should put all information pertaining to fuel subsidy removal and your plans there so that any Nigerian who wants to see a blow-by-blow action plan and monitor implementation should be able to do so including journalist who can spread the word to a wider audience. Madam Ngozi Okonjo-Iweala did several things well in her first stint as Minister of Finance, one of which was publishing what was distributed to State Governments every month in Nigerian dailies, you should publish how much from the fuel subsidy savings have been used and for what projects on a weekly/monthly basis and provide the copies of the winning bids for all to evaluate.
Sir All Nigerians including both rich and poor, believe that the fuel subidy is our right for better or worst. Removing it is akin to placing a tax on us and when one pays taxes they are entitled to see what their tax Nairas are buying. So we the Nigerian people are saying we are entitled to see what the fuel subsidy removal savings are buying. The closer to real time you can make this information available the better.
Sir I have many more observations but I will limit it to three for now so you can digest it well. Goodluck with the Negotiations!!!
Advice to Comrades of Organized Labour
My sister was a deputy Labour leader in Nasarawa State so I understand the pressures on you to get the best deal from the Federal Government.
I just want to admonish you to go in with an open mind with no preconditions and think of alternative scenarios where you will be able to walk away satisfied without the President reverting to N65 per litre price. An example is that all States implement the N18,000 minmum wage.
Another option which I will advocate for long term engagement with the Government is the German approach where Organized Labour, Business and the Government work together to hammer out hard decisions together such as increasing the minimum wage or removal of subsidies be it fuel subsidy or fertilizer subsidy or application of subsidies such as education support etc.
I wish you the Best of Luck in your Negotiations with the Federal Government.
Monday, January 9, 2012
Open Letter to President Goodluck Ebule Jonathan on the Subject of Fuel Subsidy Removal January 9, 2012
Dear Mr. President
I agree with you and the Nigerian government that the fuel subsidy does not benefit the common man. But while I do agree that it makes sense to remove the subsidy I am of the opinion that the subsidy removal has to be done incrementally over the span of 2 to 4 years depending on the conditions on the ground. The impact of your policy so far has been to shock the Nigerian economy and probably if it continues will bring the economy to a standstill something neither you nor your government want to happen, in fact no well-meaning Nigerian would want this to happen.
Sir, what you have given us in Nigeria today is what the world or the West went through in the 1970's when the OPEC/ Arab Oil Embargo was put in place. The price of crude oil jumped from $3 a barrel to $12 overnight then and in Nigeria a liter of petrol jumped from N65 to N141 overnight. The impact of the price shock caused by Arab Oil Embargo in 1970s was a recession. What will the impact of the your Happy New Year 2012 gift to the Nigerian people be?
That said let's get back to the point. Oil subsidy removal is a good thing but must be done properly and humanely. I would argue that you and your team go back to the drawing board and come up with a phasing-out-of-subsidy strategy something akin to this:
Jan 1 2012 N 65 to N 90; July 1 2012 N 90 to N 120; Jan 1 2013 N 120 to N 150 or market price at that time.
I do understand that you have have to work with the budgeting cycle and since that is the case you could increase the price by a third (1/3) in 2012 and increase it by the balance two thirds (2/3) in 2013 if you cannot find a way to do mid-year increases.
You may ask, why phase the subsidy removal and not just do it one time. Well Sir, first thing is that it will calm down the populace. Right now the biggest argument I've heard and read from protesters on BBC and twitter is that they want you to tackle corruption first before removing the fuel subsidy for many reasons that I don't have to mention here. So many people agree with me that fuel subsidy must go but they also are clamoring for more transparency and accountability from you and all public office holders who until now have for the most part been happy with the status quo. So what does phasing-out the Subsidy have to do with fighting corruption?
Well Sir, the beauty of a phased approach to subsidy removal is that you can tie it in to specific benchmarks which could be directly related to the impact of the subsidy removal such as inflation e.g. increase in cost of food and transportation or say for instance the fight against CORRUPTION. You could make subsidy removal contingent on economic factors and other factors such as the ability of EFCC to actually investigate, prosecute, obtain convictions, and jail current and former political office holders such as Governors, Senators, Legislators etc.. who have broken the law as a prerequisite for further fuel subsidy removal.
Mr President opportunities like this one come once in a thousand years and it will be a shame if you lose out on this opportunity to make a lasting impact on the lives of Nigerians. As Rahm Emmanuel, President Barrack Obama's former strategist and confidant said, never let a crisis go to waste. Mr President this is your chance.
We are praying for you and for Nigeria and look forward to debating such issues openly. I am only one of the thousands and thousands of Nigerian's with ideas of how to make Nigeria great again. Give us a chance!!! Do not stifle our economy with a botched implementation of a good idea.
One Nation bound in Freedom Peace and Unity.
Shekwoduza (Duza) Jonathan Baba
I agree with you and the Nigerian government that the fuel subsidy does not benefit the common man. But while I do agree that it makes sense to remove the subsidy I am of the opinion that the subsidy removal has to be done incrementally over the span of 2 to 4 years depending on the conditions on the ground. The impact of your policy so far has been to shock the Nigerian economy and probably if it continues will bring the economy to a standstill something neither you nor your government want to happen, in fact no well-meaning Nigerian would want this to happen.
Sir, what you have given us in Nigeria today is what the world or the West went through in the 1970's when the OPEC/ Arab Oil Embargo was put in place. The price of crude oil jumped from $3 a barrel to $12 overnight then and in Nigeria a liter of petrol jumped from N65 to N141 overnight. The impact of the price shock caused by Arab Oil Embargo in 1970s was a recession. What will the impact of the your Happy New Year 2012 gift to the Nigerian people be?
That said let's get back to the point. Oil subsidy removal is a good thing but must be done properly and humanely. I would argue that you and your team go back to the drawing board and come up with a phasing-out-of-subsidy strategy something akin to this:
Jan 1 2012 N 65 to N 90; July 1 2012 N 90 to N 120; Jan 1 2013 N 120 to N 150 or market price at that time.
I do understand that you have have to work with the budgeting cycle and since that is the case you could increase the price by a third (1/3) in 2012 and increase it by the balance two thirds (2/3) in 2013 if you cannot find a way to do mid-year increases.
You may ask, why phase the subsidy removal and not just do it one time. Well Sir, first thing is that it will calm down the populace. Right now the biggest argument I've heard and read from protesters on BBC and twitter is that they want you to tackle corruption first before removing the fuel subsidy for many reasons that I don't have to mention here. So many people agree with me that fuel subsidy must go but they also are clamoring for more transparency and accountability from you and all public office holders who until now have for the most part been happy with the status quo. So what does phasing-out the Subsidy have to do with fighting corruption?
Well Sir, the beauty of a phased approach to subsidy removal is that you can tie it in to specific benchmarks which could be directly related to the impact of the subsidy removal such as inflation e.g. increase in cost of food and transportation or say for instance the fight against CORRUPTION. You could make subsidy removal contingent on economic factors and other factors such as the ability of EFCC to actually investigate, prosecute, obtain convictions, and jail current and former political office holders such as Governors, Senators, Legislators etc.. who have broken the law as a prerequisite for further fuel subsidy removal.
Mr President opportunities like this one come once in a thousand years and it will be a shame if you lose out on this opportunity to make a lasting impact on the lives of Nigerians. As Rahm Emmanuel, President Barrack Obama's former strategist and confidant said, never let a crisis go to waste. Mr President this is your chance.
We are praying for you and for Nigeria and look forward to debating such issues openly. I am only one of the thousands and thousands of Nigerian's with ideas of how to make Nigeria great again. Give us a chance!!! Do not stifle our economy with a botched implementation of a good idea.
One Nation bound in Freedom Peace and Unity.
Shekwoduza (Duza) Jonathan Baba
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