Dedicated to Nigeria's socio-political issues
October 3, 2007 - December 2, 2007
That “Independent Cushion Committee” of Senator Ibrahim Mantu
Mobolaji E. Aluko
Friday, October 29, 2004
In May 1998, the Central Bank of Nigeria (CBN) under Paul Ogwuma wrote a nine-page review paper (in its maiden issue of its Special Economic Review Series SERS dated May 4, 1998) titled “Persistent shortages of Petroleum Products in Nigeria: A Re-appraisal of Causes, Effects and Remedies.” Just over a month later, on June 8, the man Abacha, the then military dictator of Nigeria, died.
Rather than summarizing the article, I urge you to read it yourself:.
It is on account of avoiding fuel shortages that the government has purportedly always been increasing pump prices: that notion is the connection between the CBN write-up and the problems that we are having today, that portend another national strike after a recent one.
The review noted that in 1997, when we had a pump price for petrol of N11, we had the distribution of charges as follows
PTF – N5.30
Government - N2.40
According to the CBN, NNPC was then pleading for N5.00, while the Marketers were pleading for N2.60 share.
Yet, just seven years, in 2004, we now have the pump price hovering between N50 to N70, and even N100 in some places in the country: almost a 50%-100% per year increase on average !
Since 1998, our Naira has gone from N88 = $1 to N130 in 2004, so that even in dollar value, what we have is a 34% - 68% per year increase in fuel price. In Abdusalami Abubakar’s 1998 “Budget of Transition”, the country’s budget was based on $17 per barrel. Last year’s (2004) budget was based on $25, while Obasanjo’s latest budget (2005) - Budget for “Building Physical and Human Infrastructure for Job Creation and Poverty Eradication" - is based on $27, despite the fact that the price of a barrel is actually hovering around the $50 per barrel mark right now. During that 1998-2005 period, Nigeria’s annual budget went from N260 billion to the current N1.618 trillion. Our total oil revenue was $9 billion in 1998, $16.5 billion in 2002, $20.9 billion in 2003, and has topped $27.0 billion in 2004, so much so that the latest projected surplus (over the $25) for 2004 is N605 billion – or $4.6 billion – half of which is being planned to be held in savings “escrow”, and the other to be “shared” among the tiers of federal, state and local government on a monthly basis in 2005.
So why is it that the country getting richer, but the citizens are being suckered the more? What kind of social arithmetic is this? Why is it that, according to Charles McPherson, Senior Advisor in the World Bank Group’s Oil, Gas, Mining and Chemicals Department “Nigeria…..is emblematic of many oil-producing developing countries; [Nigeria’s] GDP per capita remains at less than $1 a day, despite the fact that $300 billion in oil rents have been generated over the past 25 years.”
Why is it that “Despite its huge oil wealth, most of Nigeria's population is extremely poor. According to the World Bank, around 80% of Nigeria's oil and natural gas revenues accrue to just 1% of the population, while the other 99% receive the remaining 20% of the revenues. Overall, Nigeria's per capita oil export earnings are the second lowest in OPEC, next to Indonesia, at around $212 per person (in constant $2004). This compares to $589 per person earned in 1980, the peak year for Nigerian oil export revenues (in inflation-adjusted terms).”
And if the succeeding military governments messed us up so bad earlier as this administration always claims, why is it that in this civilian, “democratic” government since 1999, no relief has been given to the masses – electricity, mass transportation, water, employment, food, education, etc. - despite a tripling of oil revenues?
Why cannot just one-quarter of the 2004 excess oil - $1.15 billion – have been used to “cushion” the fuel price, so that it did not rise by 25% within two days? What kinds of reforms are being proffered to our long-suffering, poverty-stricken and/or dying citizens?
Inquiring minds want to know
And we are not impressed by the doubling and tripling and quadrupling of salaries to just 1% of Nigerians!
ENTER SENATOR IBRAHIM MANTU, CFR
In response to the latest four-day strike orchestrated by LASCO/NLC, President Obasanjo set up a 33-person Committee long-windedly referred to in his recent budget speech as the “Independent Coordinating Committee for Cushioning Measures.” Anything named “Independent” so loudly in Nigeria is suspect – like INEC.
Anyway, reports are that this Committee has met at least three times. As this “Cushion and Pillow” Committee continues to meet, it should recognize that Nigerians all have gone this way of talk-and-talk before. It will almost likely find no new reasons other than those given by the Central Bank above.
What is demanded now is not palliatives but substantive action along the lines outlined many moons ago by the Central Bank, using the substantial oil windfall that we have recently received, and deploying our indigenous engineers massively to solve this national problem once and for all.
All hands should be on deck.
STOP PRESS: Bumper “Gold Rush” Profits by Oil Companies
So here we have oil companies laughing from Port Harcourt to London and the Hague, while we from who they get their oil are “suffering” but not smiling at all! In fact, Shell has just fired 22 managers, and is scheduled to dump 4,000 more junior and mid-level workers next week!
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This page was last updated on 10/27/07.