IT is a factual error to conflate the subsidy uprising of 2012 and the crisis of 2020. True, both speak to a national emergency, but the circumstances are starkly dissimilar. Nigerians that marched across the nation in the harmattan-scorched January of 2012 were actually protesting a touted rising economic tide that didn’t in any way raise their individual boats.

Rather, what they saw was an emergent tribe of free-loaders fattening on petrol subsidies. Then Senator Bukola Saraki had blown the whistle: billions of naira budgeted as petrol subsidy originally were ballooning into trillions. And the beneficiaries were mostly campaign donors to the ruling party in the 2011 polls in the most audacious sort of political incest.

Just a teaser of the profligacy and squandermania that had seized the land then: the Excess Crude Account, ECA, with $22bn bequeathed by Umaru Yar’Adua in May 2010 had been decimated to $4bn by the turn of 2010. The people saw briefcase buccaneers without recognisable addresses receiving fat concessions to import fuel while established oil majors with known massive storage facilities got far less. Very little, if anything at all, was imported eventually. While the nation’s treasury was being bled to death. It is, therefore, a misreading to assume that what drove people to anger then should also be leading them to street protests today.

What then seems confounding to many naysayers gifted at imagining the worst possible scenario in the circumstance, is why Nigerians didn’t pour unto the streets in droves spontaneously in anger like 2012 immediately the fuel stations jerked up petrol’s price this time. Provocative enough, the hike came at the same time as the increase in electricity tariffs.

Painful as the twin-blows might feel, most Nigerians appear to have chosen not to live in denial. Those circumspect enough have surely realized we have arrived at a defining maelstrom – that point when a cataclysmic occurrence alters the course of history forever. One, it should be noted that President Muhammadu Buhari, by personal philosophy and instinct, will ordinarily side with the poor. For the ascetic from Katsina, it is always a thing of pride to be labeled the champion of the poor and the vulnerable. But the dire economic reality of the moment obviously leaves him with little or no option.

Indeed, the world economy we once knew before March this year has been severely disrupted by COVID-19, displacing even the most affluent. Almost all the big economies around the world have officially declared recession. Even a “nanny state” like oil-rich Saudi Arabia has since cut down sundry subsidies, doubled VAT and stopped monthly cash handouts to citizens, to stay afloat. Elsewhere in the US, according to a CNN survey, no fewer than 40 million mortgage-owners in the acclaimed “God’s own country” were facing eviction by the end of August over back pay. Now, back at home, our revenue and forex earnings fell by 60 percent in the first half assessment of Year 2020 on account of COVID-19 pandemic. Contrary to even the modest growth earlier projected for Year 2020 barely a year after exiting the recession inflicted by the steep crash in commodity prices in 2014/2015, our economy has instead suffered a contraction of more than six percent in the first half of the year on account of the a total shutdown of the economy for four months, with expected foreign inflow shrinking by about 78 percent.


True, disruption is a given in world economic climate almost every decade. For instance, the prime mortgage crisis birthed the tsunami of 2008/2009, with the attendant dislocation of big businesses and national economies across the universe. If the impact was benign for us in Nigeria then, it was largely because of combined foreign reserves of over $60bn. Aside from the foreign reserve of $46bn, there was ECA in excess of $20bn. Of course, this offered a robust buffer for government then to navigate the turbulence with little inconvenience.


In 2015, the ECA the Buhari administration inherited was $2bn. Even at that, $1b had to be set aside to procure military hardware and software to strengthen the nation’s push against a decade-old insurgency in the North-East. If the 2015 situation was lean, the condition of 2020 is, therefore, better imagined with practically nothing left in ECA to allow the administration any flexibility in responding to the COVID-19 emergency. Against this backcloth, it is clear that the ordinarily populist advocacy for a policy option mindful of social protection is simply no longer feasible in the face of sparse reserve. Whether we want to admit or not, the truth is that the day of reckoning is finally here for us to atone for past iniquities in a way that will reset the nation to a more sustainable path henceforth.


https://www.vanguardngr.com/2020/09/fuel-the-day-of-reckoning-is-here/

Nice article.