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Deregulation and Electricity Hike: Nigeria’s Haunting Shadows

Deregulation, subsidy and electricity hike are not new in the history of Nigeria. Successive governments in the country’s current political dispensation from 1999 till date have battled with these tripod issues in the country’s political life. Thus, recent announcements by the government on these issues are not new to Nigerians who have been enduring and bearing the brunt from its political class over the past 20 years. Therefore, Nigeria and her citizens will have to live with these haunting shadows for many years to come. Until there is a change and inherent issues addressed, the drama will continue because it might not end with this current government since they have become part of the country’s national life.

The 1st Deputy President of the Trade Union Congress (TUC) a sister organization of Nigeria Labour Congress (NLC), Innocent Bola-Audu said, it is quite unfortunate that at the time the country is experiencing hardship caused by Covid-19 pandemic, hike in fuel and electricity have haunted the country again. He said labour is concerned, and consultations were not carried out before the hike was announced. Labour has sent its representatives to government while waiting for response from them before the next line of action. “We have told them they have to reverse back especially the electricity tariff because at a point the National Assembly (NASS) and other stakeholders intervened that these increases if at all will happen, it should be in 2021. This is because Covid-19 affected Nigerian workers and the rest of the world.”

Businesses are not thriving and people are struggling to survive and the government has approved increase in electricity tariff. Labour has reservations on the issue.

Looking at existing parameter, the current value of Nigeria currency has fallen below living standard. One cannot fathom earnings of civil and public servants compared to the increment.

However, Bola-Audu emphasised that labour was not totally against increment, the timing of these increases is what it is challenging. People should be sensitized with thorough explanations using certain indices for them to understand. “What is N30,000 which is the minimum wage that a worker earns, considering the value of the naira to the dollar.” During Covid-19, some countries supported their citizens with palliatives and free money. But not even N1 was added to Nigerian public life either as civil servants or private sector. “Nobody got extra N1 as augmentation or supplement. What they got is increase in tariff which is like 50% or 100% at this time. This is what labour is arguing.”

The conversation around subsidy removal considering the fact that trillions of naira according to the government had been saved by removing subsidy.

Bola-Audu noted that the situation remains unexplainable. On one hand the government claimed it is paying subsidy but nothing changes in the market. People are wondering what the subsidy was paid for. The subsidy regime is shrouded with fraud. “No one is enjoying subsidy as far as Nigerians are concerned.” Nigerians cannot feel it, hence the conversation around subsidy is shrouded in mystery. The government should clear the air with explanations on subsidy, then the citizens will take it serious especially on national issues.

It is astounding why the policy did not work in Obasanjo’s era. The policy of refining petroleum products outside the shores of Nigeria and importation to sell to Nigerians. What is this policy that did not work in Yar’adua’s era, it didn’t work for Jonathan’s government and it is not working for the present administration of President Mohammadu Buhari?

Successive governments in the country has continuously import petroleum products. What are the economic managers of Nigeria thinking? A policy that has never worked for the country, why has it not been nipped in the bud for many years. To continue in subsidy means the government wants to continue in fraud and deceit to Nigerians.

The government has to rescind its decisions on importation of fuel. What does it take the government to build modular refineries across the country? For instance, for the past five years, Kaduna refinery has been shut down without operation, “labour does not know what the government is doing in terms of subsidy, it is all corruption.”

The Deputy President of TUC added that it is a sad commentary in Nigeria’s national life.  But labour will continue to engage the government, suggests ways and means to them if they want to buy into its ideas to help and alleviate the sufferings of public servants and Nigerians at large. “This is what we intend to do, but government must come with clean hands and be ready to engage with us continuously. There is not enough move for advocacy on policy. This is why government involves in policies that boomerang.”

Watchers of Nigeria’s economic and political development believed that the posture of labour is reactionary, why should it wait for price increase before engagement with government?

Bola-Audu said, the fact is that labour has had several fora where it has made reasonable contributions. However, it finds itself in a system where government don’t make its intentions and policies known to labour. The only way is to react.

For instance, there should have been engagements before making pronouncement on the increase of electricity tariff and pump price. “Unfortunately, it is a system that makes it looks as if you are working together, suddenly there is a turn around and they stab you at the back, this is what they have always done to labour.” “They will call us for a meeting, we will exchange ideas and they will tell us they have agreed and the next thing, there is a change from what was deliberated.”

On the aspect of deregulation, the government through the Minister of State for Petroleum Resources disclosed that it is stepping down for deregulation to take place so that market forces will determine prices.  But its position remains unclear because it has pegged certain prices which Premium Motor Spirt (PMS) will be sold for N151 to N161. The concern is, if the current situation represents deregulation. At what value are the market forces getting foreign exchange to get the product? Marketers will factor out this. Is government ready to give them the needed foreign exchange to import fuel, if marketers get dollars at N500 how can they be controlled? Consumers will not listen to them. The variables surrounding the parameters of stepping back by the government have been thoroughly examined. Nobody knows.

TUC don’t believe that government is serious with deregulation allowing market forces to determine price of petroleum products. The union is not convinced.

As regards electricity, the Distribution Companies (DisCos) have been given opportunity to increase tariff while some want to opt out of the agreement seeking their stakes to be returned citing failure in privatisation.

Bola-Audu stated that it is only in Nigeria that government involves in a privatisation programme that is not working and nobody is sanctioned for failure. The issue of electricity in the country is a national embarrassment to successive governments before it was sold and after it has been sold.

Surprisingly, those who privatised the defunct National Electricity Power Authority (NEPA) have not been accountable for its failure. The exercise was designed purposely for it to fail. From DisCos to Generating Companies (GenCos) and Transmission Company of Nigeria (TCN) do not have transmission lines to transmit, no capacity to distribute, it is a failure right from the outset waiting to happen. The disturbing part is that privatisation is opaque in such a way that successful governments have no power to review the contract.

Notwithstanding, Bola-Audu said, labour is considering issues surrounding privatisation policy of Power Holding Company of Nigeria (PHCN), which it strongly objects that the policy won’t see the light of the day. It has engaged government in several means through strike actions to put pressure on them to consider the plight of the people. But government still went ahead to sell the utility company to its cronies.

Adding his voice on issues around hike in electricity and fuel increase, Mr. Oke Epia, a communication expert said, sentiments shown by Nigerians are not misplaced. Nigerians are already hit hard by Covid-19 pandemic. “I agreed with the sentiments expressed by Nigerians, and they must be allowed to instantiate these sentiments.” The government on its part is also hard pressed and it is sourcing for money.

Although, this does not justify its actions. It is relieving free resources to be able to implement social welfare programmes for the citizens which is not easy to come by due to present circumstances. When you have a scheme that gulps as much as N10 trillion in 10 to 12 years, money that would fund a lots of development deficits in the country, such draconian policy should be jettisoned.

Epia was of the view that subsidy is a nebulous scheme that has not clearly define its beneficiary. Who are those really benefitting from subsidy? He disclosed that in 2012, when the House of Representatives started a probe on subsidy scheme, there were reports and clear cases of corruption. Subsidy provides avenues for corruption which is borne by Nigerians and a denial of social service delivery to the citizens.

The communication specialist advocated for stakeholders and citizens engagement. In March, fuel price was down due to low price of crude. The window of opportunity of bringing down the price should have been further engagement by government to sensitise people that if the price of crude goes up, increment follows. This will trigger conversations with various stakeholders. Price has gone up and people are enraged.

In 2012, during the Jonathan administration, the government had a scheme known as Subsidy Reinvestment and Empowerment Programme (SURE P) and explained that it was re-investing money meant for subsidy for savings. They gave reasons which do go down well with some vested interests.

Labour has not been proactive to nip increment in the bud considering the fact that government has not explained how it deploys revenues from STAMP DUTY and other tax collections in the country.

The subsidy debate is not new, there has to be clarity on the issue. The Petroleum Act gives the Minister of Petroleum Resources, which is the current president of Nigeria, the power to fix prices. These are key statutory issues that have not been addressed. If the government is deregulating, on what grounds? Is the law no longer relevant?

Also, Minister of State for Petroleum Resources, Chief Timipre Sylva, explained that the government has stepped back and claimed deregulation. But no prove that the country has deregulated fully its petroleum sector.

For over one year into the second term of the present administration, the country has no Petroleum Industry Bill (PIB) to govern its petroleum sector.

What is labour and civil society doing for government to express itself? It is a collective question that needs to be answered. Nigerians have waited to be pushed to the wall to react. They are entitled to their rights to express misgivings which should not be suppressed.

Giving his perspective on the issue of electricity tariff, Epia opined that the issue of increment started in April and the National Assembly intervened. There were meetings held on the issue with collective agreement to defer hike to 2021. In a sudden reversal, the regulator told the public that it has secured approval by the president that supposedly had meetings with leadership of NASS that hike will be on September 1st trust and confidence building were thrown overboard. How can citizens trust a government that speaks from both sides of the mouth?

“Communication is all about speaking, it is also about actions, when you say one thing and you do another, people perceive incoherent, inconsistency and they are not likely to take you serious when you talk about deregulation that is still opaque and unclear.”

In terms of electricity hike and fuel increase, human right activist and General Secretary, Alliance for Credible Election, Mma Odi, clearly stated that Nigerians are paying for incompetence, corruption and insincerity on the part of government. “Nobody stops government from fixing refineries and ensures they are working in good condition and stops importation of fuel.”

According to her, former Head of State, General Sani Abacha revealed that there was no subsidy. Subsidy is deception and falsehood which the current government claimed when it was in opposition. She alluded to the fact that former President Musa Yar’dua reduced PMS from N75 to N65. She asked, why are all the refineries not working to optimum capacity? The importation of fuel and subsidy are shrouded with corruption. “Where are the market forces when Nigerians pay more for increase and decrease of petroleum products? The citizens bear the brunt of incompetence, corruption and insincerity in government institutions.”

It is common knowledge that citizens pay more for tax, electricity and petroleum products that is a natural resource in the country. There is growing belief that there are saboteurs who do not want the refineries to work so as to pave way for importation of petroleum products.

Although licences have been issued to operators to build refineries in the country, no one has venture into it except the Dangote refinery that gives ray of hope to Nigeria.

The level of protest in 2012 shows that some administration did not possess power to remove subsidy due to popular agitation from labour movement.

Odi made it known that it is not fair for the civil society that has maintained sealed lips on the issue compared to what it did in 2012. Something has been missing which is a clear gap of leadership of the civil society. Some credible and transparent vocal advocates have died in the country leaving a gap that has not been filled after their exit. The public were ready to lay down their lives by following these social advocates with trust.

The activist said a new vocal leadership has to be in place hence labour has become a bull dog that barks and cannot bite. Many Nigerians are dying of poverty and hunger due to hike in food stuff and other essential commodities. Labour has only responded that the timing is wrong without any viral action to put the government to its knees as it did in previous administration especially the Jonathan days.

A major issue is that those who fought for misdeed, misrule and injustice of the military era are currently playing active and supportive role to the current government, it becomes difficult to have contrary views against a government they are benefiting from.

According to Odi, no one has the right to increase tariff or hike petroleum products without due consultations. The government should fix refineries and stop importation of petroleum products. She bemoaned the tepid action of TUC and NLC on the ongoing hike and increase of tariff in the country.