On January 1st, Nigerian President Goodluck Jonthan put into place a reform that he and key ministers have been discussing for years: he ended a 20-year old subsidy that kept Nigeria’s petrol prices the lowest on the continent. When Nigerians went back to work on Monday, the 2nd, they discovered that not only had petrol increased from $0.40 to $0.91 a litre, but the cost of private taxis, minibuses and other forms of transit had increased in price as well.
By Tuesday, the 3rd, protesters in Lagos were blocking access to petrol stations and shutting down stretches of motorways by building and burning barricades. On the 4th, protesters in Kano shut down petrol stations and threatened to burn down a newspaper they believed was supporting the removal of the subsidy. They occupied Silver Jubilee Square in the center of the city and attempted to maintain an encampment overnight, though police responded by firing tear gas and, allegedly, working with armed gangs to clear the square through violence and intimidation. The protests are led, in part, by two powerful trade unions, National Labour Congress and Trades Union Congress, who have promised to “occupy” Nigeria until the subsidies are restored. They plan a nationwide strike, beginning January 9th.
Michael Bociurkiw, writing in the Huffington Post, notes that it wasn’t obvious that petrol price increases would trigger such widespread protests. After all, there’s lots to protest in the country. Despite being sub-Saharan Africa’s largest producer of oil, most Nigerians are quite poor, the nation’s infrastructure is shambolic, and political corruption is widespread and well-documented. A rigged election in 2007 (and controversy over a mostly-clean election in 2011) led to some heated rhetoric, but little visible protest.
But petrol prices affect every aspect of life in Nigeria. The country has no (functioning) mass transit systems, which means urban dwellers are reliant on a complex system of minibuses, taxis and motorbikes, operated as private businesses. Those businesses will be sharply affected by the petrol price increase and pass the costs on to their customers. And because Nigeria’s electrical grid and power producing stations are notoriously unreliable, most businesses use generators to power their operations. Those generators have just become at least twice as expensive to operate, which is likely to increase prices at a wide variety of businesses. Complicating matters, Nigeria is least stable in the north, where tensions between Muslim and Christian groups have erupted into violence, and where the terrorist acts of Boko Haram, an extremist organization which wants all non-Islamic education and culture banned from Nigeria, have pushed President Goodluck Jonathan to declare a state of emergency in the North. Because the north is distant from the ports where Nigeria lands imports, goods are likely to increase sharply in price in the already troubled region.
Jonathan is not the first Nigerian leader to try to remove the fuel subsidy. Two of Nigeria’s military leaders – General Ibrahim Babangida and General Sani Abacha both tried to end the expensive program, and both were forced to back down due to popular opposition.
On the one hand, it’s exciting to see a Nigerian population that’s often overwhelmed into inaction taking to the streets. Stories about Muslim and Christian protesters finding agreement over shared prayer space – and images of Nigerian Christians encircling and protecting Muslim protesters at prayer in Kano – are genuinely encouraging. And there’s no doubt that making a living was a tough prospect for ordinary Nigerians with the subsidy in place and that a tough situation will get worse without it.
That said, ultimately, I think Nigeria needs to get rid of the subsidy. It’s incredibly expensive – depending on how you account for it, it cost between $8 billion and $16 billion in 2011. Nigeria’s tax authority collected just under $18 billion in 2010, and budgets for key sectors of the Nigerian economy are substantially smaller than the cost of the subsidy: defense spending is proposed at $6 billion, education at $2.5 billion, health at $1.8 billion. And while the subsidies make life easier for ordinary Nigerians, they’re a massive boon to the few companies the government allows to import refined petroleum… and contracts to import those petroleum products are a likely source of patronage revenues for corrupt government figures.
The IMF has pressured Nigeria to remove fuel subsidies for years, and Nigerian Finance Minister Ngozi Okonjoâ€“Iweala, an internationally celebrated economist and anti-corruption reformer has been a powerful champion of reforms, offering long briefings to the President and other leaders on the importance of the reform effort. (Rumors have circulated that she threatened to resign if the subsidy wasn’t eliminated. She refuted those rumors in classic Nigerian fashion… on Twitter.)
Ideally, the Nigerian government would use the monies freed by eliminating the subsidy to address some of the country’s chronic problems: weak road and rail infrastructure, unreliable power, run-down refining facilities. It’s possible to imagine a Nigeria where imported petroleum products were less necessary, if the country had functioning rail systems, a reliable power grid minimizing the need for generators, and refineries that could produce diesel and gasoline locally. Given the history of corruption in the Nigerian government, it’s not hard to understand why many Nigerians are skeptical that the monies released from the subsidy will go anywhere other than in politicians’ pockets. As the BBC observes, many Nigerians feel like the fuel subsidy is the only government service they actually see.
If you want to understand opposition to removal of the subsidy, an oddly partisan view can be found on the Occupy Nigeria wikipedia page, which is quite far from NPOV, but a very interesting read nevertheless. Statements from Central Bank of Nigeria Governor Lamido Sanusi make the case for subsidy removal in a piece on Bloomberg News. His basic argument: Nigeria needs to borrow a lot of money to build infrastructure, and responsible lenders won’t give the country money as long as it keeps doing boneheaded stuff like subsidizing oil consumption instead of building infrastructure.
Even though I think Nigeria needs to end the subsidy, I would be surprised if Jonathan can sustain these changes in the face of a sustained strike. There’s tension already over the idea that this isn’t Jonathan’s “turn” at the presidency – there’s a popular notion that Nigeria’s presidency should rotate between northern Muslims and southern Christians. The previous president, the Muslim northerner Yar’Adua died in office, and Jonathan finished his term. Some believe that, by this rule of thumb, the 2011 president should have been a northerner… Some northern activists and some labor activists have made threats that they will make Nigeria “ungovernable” during a Jonathan administration. It’s not hard to see how protests over fuel could make Nigeria vastly harder to govern.
I’m interested to see Nigerian take on some of the rhetoric and tactics of the Occupy movement, including the occupation of a public square in Kano. I’ll be intrigued to see whether any of the global energy over Occupy goes to support the Nigerian protesters. The irony, I fear, is that while the global occupy movement seeks to equalize income disparities and fight government corruption, the Nigerian movement is currently pursuing radical and important reforms, and the Occupy Nigeria protesters are fighting against that change. Read one way, Occupy Nigeria is a conservative movement fighting to keep a dysfunctional status quo in place, which seems at odds with other branches of the movement.