June 29 (Lagos) - Lets cut to the chase, landed price for petrol is around N 232 based on USD/NGN 410 exchange rate, pump price currently around N 165 per Litre. The difference is the subsidy which according to Punch newspaper report is around N 5.5 billion daily right now.
Subsidy is a very political topic in Nigeria. But does it have to be?
Those who are un-biased know the statements made by the current President regarding subsidy when Goodluck Jonathan was President. While that Government is largely attributed to be the one which 'chopped' the economy of the country to a stage from where we are still trying to recover, one thing they tried to correct was the subsidy problem of the country.
We are going back to January 2012 when the youth crowded the streets for months protesting against something which was in National interest because of a myopic mindset. The leadership of Okonjo-Iweala had put together a plan which would have solved our subsidy problem although it was a bitter pill to swallow.
As much as that Government was corrupt beyond imagination, they did not implement force against citizens like the manner in which the current one does. Although to be fair, the level of protests that we are facing today are not as fierce as what we had in 2012 which was largely peaceful and not self destructive in nature.
So yea, we protested in Falomo, in Alausa till the Government gave up to our demands. We enjoyed low fuel price for a while but by the time that Government was voted out, the future of the country was torn to shreds.
What followed was not the 'change' that Nigerians had voted for. A new government came in with economic policies which could not have worked even in the 1980's forget about 2015 and beyond. Immediately they lowered the benchmark lending rate in November 2015 as if they did not know that doing so at a time when your currency needs support would be shooting yourself in the foot. Naira tumbled 100% in the next 6-8 months on the parallel markets.
They forcefully lowered the benchmark lending rate below inflation rate. It was as if clowns had taken over the CBN or perhaps there were forces controlling the CBN. The way forward was to implement policies based on whims and fancies of a person such as lower interest rate today, increase it back after 2-3 months because it did not work. Why would banks lend at a lower rate than inflation? These guys needed a class in Economics 101 when they are still in charge of the CBN.
Back in 2012, we had the prudence of Lamido Sanusi, who does not miss him? It will have to be a tribal to not admit that.
So the CBN leadership collected awards like BEST In AFRICA but in reality they are best in devaluating the Naira and placing a ban in essential items that Nigerians need.
They made food items more expensive to purchase for everyday Nigerians. For those living outside Nigeria, they have restricted them to withdrawals of $100 a month. So if you travel outside Nigeria, they are essentially telling you to buy Dollars from the black market because if you do not buy from black market you can only use $100 a month. So therefore CBN fosters black market. These are the kind of things that they are best at.
Some more blunders include forcefully reducing interest rates on T-bills below inflation rate, thereby pushing Nigerians to look for more risky investments like crypto-currencies and M&M type scams or convert Naira to Dollars and wait for the next devaluation. Once again, the CBN championed the agenda for the parallel market.
Another thing they are very good at is managing the press with these envelope analysts who write articles like "NAIRA BOUNCES BACK AGAINST USD" when really is hovering near all time lows or INFLATION UNDER CONTROL when it is hovering near all time highs. It is very good management when press gives you kudos after multiple devaluations. So Naira gained 200 basis points against USD today and now it is at 495 against the Dollar. You are only fooling yourselves.
So coming back to subsidy, very soon petrol price will increase again and the usual suspects will start protesting and bring the economy to a standstill. Black market will flourish as we stand in queues like monkeys to buy fuel from touts outside filling stations.
While you do that, take a moment to reflect on 2012 when we really had something going for us and how we lost it listening to opposition politicians who are now in control and running the economy like a circus where we are monkeys and the lions.
We must unite and vote better come 2024. By the time it comes we could be looking at a currency pushing 700 to one Dollar based on the Best in Africa that we have in charge at the moment.
If the CBN leadership granted an interview to easykobo, they must weep before the end of it for what they have done to the economy. But that will never happen. They might even get us banned for writing such articles. We have suffered so much since 2015 we will hardly notice.
So 5.5 billion subsidy daily is where we are at. All of us protested that we wanted it. Now you have it. Enjoy the lineups, they will be here soon.
writer of this article chooses to remain anonymous due to pricing.