As Nigerians await the total removal of the fraud called ‘fuel subsidy’ to save our economy from total collapse, another subsidy appears to be in the offing. Should the All Progressives Congress, APC, finally summon courage to strangle oil cabals, the party is likely to replace them with ‘human cabals.’
Recently, the Nigerian Vice President, Prof Yemi Osibanjo announced the readiness of the new administration to honour its campaign promise of keeping every unemployed Nigerian in its payroll to cushion the effect of poverty in the land. To that effect, the administration is proposing a monthly stipend of N5,000 for teeming unemployed graduates in the country, and strikingly impoverished Nigerians. From the time this promise was first made during the ‘change campaign’, the promise has been laughable. Part of the skepticism that greeted it earlier was that the APC was going too cosmetic, degenerating to promises of stomach infrastructure just to win votes. Many analysts saw the proposal as a gap in understanding of governance in a complex country like Nigeria; an indication that the party had no idea of how deep the country has sunk into poverty.
The general cynicism on the chances of the promise seeing the light of the day was not helped by a follow up promise where the APC told Nigerians that if voted into power, every school child in the country would be assured of getting at least a meal in the class during weekdays, courtesy of the federal government.
The fact that the presidency has reiterated its commitment to keep the promise of paying poor Nigerians and those who are out of the labour market a monthly take-home, means the administration is serious with the promise. Yet, the concern remains that the government has not come to terms with the realities on ground.
While the proposed scheme might have been influenced by the practices of developed countries, it is good to remind the federal government that Nigeria lacks those indices that have kept the scheme working in those economies. And again, those economies are working hard to diversify and see that they are absorbed in no long time.
The scheme may be attractive but it has the capacity of slowing down the country’s response to developmental challenges. According to statistics released by the former Coordinating Minister of Economy, Dr. Ngozi Okonjo Iweala, 1.8 million graduates enter the labour market every year in search of jobs; and no fewer than 5.3 million Nigerian graduates are jobless at the moment. And in 2014, the National Bureau of Statistics put the population of Nigerians living in poverty at 112million representing 67 per cent of the country’s 167million population. These figures have been disputed to be on the low side. When these add up to the expected inflation of figures, the reality will be clearest. The implication of paying N5,000 each to 112million people every month is enormous. At present, the government at various levels exists only to pay salaries because little amount is devoted to capital projects. Annually we see 75 per cent of the budget going into recurrent servicing. When the new program commences, the remaining percentage which goes to capital project will shrink more. With this, the beneficiaries will be denied opportunity to contribute to the economy since government lacks financial stamina to build industries to absorb them.
That is not the whole tragedy; the proposed stipend is too meager compared to the high cost of living in the country. This means that while government leaps, the stipend is, still, unlikely to impact positively on the economic fortunes of the beneficiaries. With such arrangement sustained for years, Nigeria will further degenerate into a consumption economy and our dependence on others will be full blown.
When the idea of fuel subsidy was introduced, it was to cushion the effect of buying the fuel at its imported price on poor Nigerians. Unfortunately, the country is dragging its feet today because of the activities of oil cabals who have hijacked the entire scheme to steal from our economy. The fraud has taken different forms such that it is not clear whether the whole idea of subsidy is not entirely a scam. Here and there, it has always been one problem or the other. The worst is that while government suspects the scheme, it does not know how to arrest the fraud. This is because the dealers in the sector have perfected the fraud system such that every attempt to externally investigate the sector always ends in the more-you-look-the-less-you-see.
The worst is the distortion of Nigerian mind by the cabals that without fuel subsidy, their lives will be unbearable. This myth was sold to Nigerians and every sector has been induced and is always protest-ready to resist every effort by the government to remove the subsidy. With this inducement, Nigeria’s vibrant response to development has been postponed. On its part, the government has also used the oil subsidy as an excuse for poor performance. That is why when people voted the APC into power they wanted a party that will do away with oil subsidy not minding the pains that will follow after.
Unfortunately, while the oil subsidy lingers, the new ruling party is leading Nigeria to another subsidy controversy. Very soon, the cry on the street will no longer be about oil cabals but human cabals who will distort the figure of the poor and unemployed Nigerians and through that means milk our country dry.
Nigerian government has a dubious reputation of hijacking good schemes. With poor national data and our distortion tendencies, the proposed scheme is liable to many pitfalls. One wonders what technique or yardstick that will be used to determine the very poor who should benefit.
Many Nigerians including those on government payroll will key into the programmes and deny the real poor the opportunity to access the subsidy. Those who manage the programme would at best enroll all their cronies, relatives, born and unborn; and at worst they would saturate the scheme with non-existent names, making the money to flow back into private pockets of the rich.
Where the scheme captures the target population, the next challenge would be the fate of a beneficiary who happens to get a job later. The likely drama is that those who would graduate from the scheme into full work force would fail to delist themselves from the scheme and would continue to receive double salaries till God knows when.
In 1999, the Peoples Democratic Party, PDP, under the President Olusegun Obasanjo came up with the Poverty Eradication Programme designed in a similar manner with the proposed scheme of the APC. On arrival, the programme lent itself to many abuses and became a siphoning tool of politicians.
In the midst of frustration that challenged the attainment of its goals, the programme metamorphosed into a Poverty Alleviation Programme. Yet, the nomenclatural change did nothing to redeem the image of the programme nor reshape its mission. Nigerians still look at it with disdain as diversionary therapy and one of those initiatives that slap on the waist of our plight.
Taken from every angle, the proposed scheme of paying unemployed Nigerians will create more problems than it aims to solve. It can’t walk at a speed faster than the Nigerian mind.
In the alternative, the APC government needs to do away with oil subsidy. The subsidy money should be swiftly reinvested in building industries which will create new jobs for the teeming unemployed and lay foundation for growth. They should also develop market to mop up our abundant agricultural produce at attractive price and make the agricultural sector the destination of new investors. The agricultural sector can, in turn, run our factories, fuel our economy and keep inflation at a single digit. When the farmers are sure to sell out their produce at handsome prices, rural farming will spring up and urban migration will decline and so will crime rate fall. To sustain this, government should give urgent attention to infrastructures like roads, bridges, electric grid and digital lines. Science needs to be restored and modern technological wonders innovated to utilize our abundant mineral resources, raise health care quality and lower cost. Schools, colleges, and universities need to be transformed to meet the demand of the ICT age and turn out skilled graduates.
In economic logic, we should learn to grow a pie and not just to eat a pie. The APC needs to do the first things first.
