John Campbell

Africa in Transition

Campbell tracks political and security developments across sub-Saharan Africa.

Print Print Email Email Share Share Cite Cite
Style: MLA APA Chicago Close

loading...

Nigeria: Beyond the Fuel Subsidy

by John Campbell
January 18, 2012

People protest on a street in Nigeria's northern city of Kano before the suspension of a nationwide strike by labour unions, January 16, 2012. (Stringer/Courtesy Reuters) People protest on a street in Nigeria's northern city of Kano before the suspension of a nationwide strike by labour unions, January 16, 2012. (Stringer/Courtesy Reuters)

In the shameless promotion category, I did an article, “The End of Nigeria’s Strike May Not Calm Oil Markets,” that appeared Monday in the electronic version of Foreign Affairs. It looks at the demonstrations and strikes last week that shut down Nigeria’s economy. Read it here.

It’s also worth reading this New York Times oped on the protests by well-known Nigerian author Chimamanda Ngozi Adichie.

The government’s decision to end the fuel oil subsidy – the only benefit from oil that most Nigerians see – precipitated a general strike and demonstrations that morphed into protests over Nigeria’s notorious corruption and misgovernment, echoing in some ways the Arab Spring. Eventually, under pressure, the government restored about half of the fuel subsidy and the unions “suspended” their strike. The government has sent troops into Lagos and other cities ostensibly to restore order and President Goodluck Jonathan has called for the arrest of prominent human rights activists, though apparently that has not yet happened. Security personnel also briefly occupied the premises of the BBC and CNN. As late as early this week, demonstrations were continuing in Kano and Lagos, though not of the same magnitude as last week.

Though the radical Islamic movement Boko Haram continued its depredations, during the strike there were remarkable demonstrations of Christian-Muslim solidarity against ending the fuel subsidy. While there has been no demonstration venue equivalent of Tahir Square to serve as a media focus, the current calm is false and the crisis is not over.

Post a Comment 5 Comments

  • Posted by Maduka

    The fuel subsidy problem is yesterday’s news, it is over.

    The major reason why Oil workers did not succeed in shutting down oil production was threats by Niger Delta militants.

    You also failed to mention that the strikes didn’t really gain traction in the South East and most of the Oil producing Niger Delta.

    Boko Haram weakens the North more than it weakens Jonathan. Boko Haram unites the South against the North.

    Jonathan isn’t as vulnerable as you think he is, that is the truth, not what we wish to hear.

  • Posted by Solomon
  • Posted by Beauty

    The current calm is false and the crisis is not over is sound analysis. However, OccupyNigeria was not about Fuel Subsidy, that was the catalyst for getting people mad enough to do something about corruption in Nigeria. It has exacerbated extreme poverty hence our “Arab Spring.” Nobody appears to be in control of our cash as our government continues to use our national treasury as their personal piggy bank while 70% live and die like rats.

    The current probe into the oil sector is forcing out a lot of skeletons and many, including those close to GEJ are going to be chased into the streets and stoned before this is over. Just watch as the ministers contradicts their own testimonies. Its a mess and who-is-who in Nigeria is involved. People are really angry .

  • Posted by John Ojeah

    I still do not think that the subsidy should be removed without putting palliatives unless it is total deregulation . Just removing subsidy does not tantamount to deregulation. What we need is total deregulation of the oil industry, both upstream and downstream. In this case NNPC’s monopoly should be done with and it should be allowed to compete with other companies, indigenous or foreign. The regulatory arm of the oil industry (DPR) should be empowered to functioned just like the Central Bank, Nigerian University Commission, NCC for telecoms, etc.

    Deregulation in this way will bring in private capital into the sector and build the much needed refinery. We should also remember that when the telecommunication sector was deregulated in 2000, Nigeria has just 500,000 lines. Also, remember during the 1990s when private ownership of internet service providers was illegal in Nigeria except through the NITEL monopoly which was also operating under subsidy. Just a little over a decade we now have over 80 million lines and about 50 million internet users and the incompetent NITEL (just like our NNPC today) could not compete. Thanks to total deregulation of that industrial sector.

    We did it in the banking sector, cement, airways, aand I see no reason why we shouldn’t do the same in the oil and electricity sector.

    Sure there was no element of strike or protest in the Southeast and Niger Delta and it is understandable. The economy in these regions are mostly driven by the private sector (largest number of entrepreneurs, private schools, private transportation system, private power generation, etc), hence, are usually indifferent to the FG with the fewest number of government workers.

    As for NUPENG and PENGASSAN threat of closing oil production, Nigerians know that it was empty. You can’t shut the wells without the support of the Niger Delta inhabitants or at least, they must be indifference to it before such a shut-down can occur. Unfortunately, they were not nonchalant in this case. To them the strike was sponsored by the fuel cabals based in Lagos who prefer importation rather than build refineries. If refineries are built, it will benefit them because such plants will be build closed to the area of crude production. Importation terminals on the other will be build in Lagos and will benefit Lagosians more. Leaders of both region understood this hence, the diverging stance on the fuel subsidy removal.

  • Posted by Maduka

    John,

    Thanks a lot for pointing out in your last paragraph the motivation for the stance adopted by the Niger Delta during the last subsidy crisis.

    Beauty,

    I’m glad there is a movement for greater accountability in government – and these are early days. But unlike the Arabs, we are not a homogeneous people, as soon as the probe gets to close for comfort, it will degenerate into an inter-ethnic shouting match. At the end of the day we could end up even more badly divided than we started.

    The major issue in Nigeria today revolves around security. Neither the occupy movement nor the Save Nigeria Movement nor Labour has shown much enthusiasm in protesting against the killings of fellow Nigerians by Islamist terrorists in the North. This is one of the reasons why these movements have tepid support in the South East.

Post a Comment

CFR seeks to foster civil and informed discussion of foreign policy issues. Opinions expressed on CFR blogs are solely those of the author or commenter, not of CFR, which takes no institutional positions. All comments must abide by CFR's guidelines and will be moderated prior to posting.

* Required