Heads you lose, tails you lose. This is the harsh reality facing Nigerians in this era of the pandemic- and low-oil-price-induced contraction of the economy. The impact of these two exogenous shocks to the Nigerian economy is being felt most acutely by the government as earnings from oil and gas, which account for the lion’s share of revenues to the federation account, have taken a major hit. The implications of this are far-reaching: Government has had to revise the 2020 budget downwards, ramp up foreign loans to make up fiscal shortfalls, and so on. The stark reality that confronted those at the helm of the treasury was that subsidies, whether euphemistically tagged under-recoveries, could not be sustained. So, what option did government have? Continue the folly of subsiding at the expense of recurrent or capital expenditures, and risk non-payment of salaries, debt obligations, reduction of critical public services (security, law and order, healthcare, education, etc.) or allow the burden to fall on the already battered populace. Government chose the latter. This reality must have been a difficult choice for government as it no doubt meant the citizens would lose either way.
Now, the hapless population wants to go on strike. Let the truth be told: It is a case of damned if you do, and damned if you don’t. Damned if you do because if the strike goes ahead, and government backs down and reverses the tariff and pump prices increases, salaries and other essential services will get the brunt. And damned if you don’t strike because energy prices relative to real income remain significantly higher, with inflation raiding pockets as food prices rocketing to compound the misery.
These are the cold bare facts, yet it is insensitive to say this to an already pummelled populace, who only see that their lot as worsening by the day. Government have made attempts to justify a situation that really cannot and should not be justified. According to countless newspaper headlines, the Vice President explained that the poor fortunes of the oil sector and revenue from foreign exchange earnings have fallen by almost 60 percent, yet the government has had to sustain expenditures to keep the economy going. It has also been said that were the country to have refineries the country would not be where it is. Yes, we should build refineries, no doubt. Would that however address the fundamental issues that caused the market divergence in the first place? It most certainly will not, and Nigerians would be faced with the same vicious cycle.
Let us accept our reality that we are in dire economic straits and really think through this strike that will come to nought. It would be counterproductive, and people will be left befuddled if government backs down due to pressure induced from strikes and yet they continue to suffer. The pyrrhic victory will not last a moment as government will not be able to pay under-recoveries and the oil marketers will not import PMS, resulting in queues outside filling stations and a resurgence in black markets at petrol stations. As for electricity, the shortfalls government has covered since the entry of private investors will cease for lack of cash, leaving the international oil companies IOCs and the Nigerian Gas Company no choice but to cut gas supplies to the power sector with the knock-on effect of even more protracted blackouts.
As things stand Nigerians have three options, sit back and be further pummelled, take to the streets with placards chanting “We no go gree” or roll up their sleeves and get on with fixing the problem that should have been fixed a long time ago. None of these options is without dire consequences. The last option which is fixing the problem is the only one that can get the country out of the woods and the truth is that it is going to be painstaking, tedious, arduous, and not a quick win. This problem has been long in the making and we have consistently swept it under the carpet. Sadly, but not unexpected, the chicken has now come home to roost.
If we do not start fixing the problem in earnest – today it is the price of petrol at the pump and electricity from the socket, tomorrow it could be a reduction in capital projects, our roads will remain deplorable and impassable, schools will further deteriorate and not be able to cater for the burgeoning youthful population, healthcare centres will persist as shells with no resources and medicament to treat basic ailments.
Fixing the problem would require the best and the brightest of Nigerians coming together, not just to come up with quick fixes but to look deeply into our habits and mores and find a new path that will revamp the economy to meet the needs of all Nigerians on a sustainable basis with the focus on production, not merely consumption.
To say that where we find ourselves could not have been predicted would be naïve or lying to ourselves. As tough a crossroads we find ourselves at, this is actually an ideal time to address all the ills that brought us to this point – as there is no longer any ducking them. To strike or not to strike is certainly not the question. The debate should centre on the extent and scope of the reconstruction of the economy. As we grudgingly accept our reality, we must put all the issues back on the table, including the justifications given for the increases, to ensure that they are not a smokescreen behind which resources get redistributed but instead entail stakeholders in the sectors fixing the economy with the overarching goal and objective being the promotion of universal prosperity rather than parochial interests.