Remembering the January 2012 Occupy Nigeria Protests... By CISLAC Three years ago this month, a monumental crisis of historic proportions unraveled and shook our country to its very foundation. At the root of that crisis were corruption, and the impunity in governance that enables, drives, and protects its perpetrators and perpetuators. This same phenomenon of corruption, grand theft and pillage of public treasury by a few entrusted with the safe keeping of our commonwealth, has alas since then grown and become not only endemic, but also pervasively systemic. If we recall, January is the month of the anniversary of that historic eruption of popular anger that became known as Occupy Nigeria, the January Uprising. Today, 9th of January 2015 marks three years since a growing spontaneous protest movement ballooned into a nationwide uprising, the most massive, and significant in our history. For it was on January 9th 2012 that the joint Labour and Civil Society Coalition launched a Nationwide general strike and mass protest that went on to involve more than 55 cities and towns across the length and breadth of Nigeria. What triggered that nationwide crisis was the unprecedented hike in fuel prices announced by the government as a New Year gift on January 1st 2012. That hike in fuel price, was prompted by government’s stated desire to end what it called the unsustainable regime of fuel subsidy. CORRUPTION IN THE PETROLEUM SECTOR AND OCCUPY NIGERIA: That crisis, the January Uprising exposed the corruption at the heart of the fuel subsidy regime, and validated the position of civil society regarding the cause of that burden on the economy. For the avoidance of doubt, it is important to restate the facts, because those facts are still clearly at play even today. What the government called fuel subsidy is the difference between the cost of importing refined products, and the pump price of fuel. This difference which is an unnecessary cost exist because our domestic refineries are in a state of dilapidation, like almost every other public basic infrastructure, as a consequence of which we have to depend on imported refined products to meet our domestic need. This situation is further compounded by the fact that the value of the Naira is not stable against the US Dollar, the currency in which crude oil is sold, refining and transportation cost is incurred internationally. The January Uprising exposed the fact that the daily consumption rate of petrol was astronomically inflated, thus exponentially increasing the cost of the subsidy. For instance daily consumption increased from just above 30 million litres per day in 2010 to 60 million litres per day in 2011, and then dropped significantly after the January Uprising to 40 million liters per day in 2012 and now average of 38 million liters per day in 2013 and 2014. Relatedly this inflation of the daily consumption rate shut up steeply the cost of the subsidy, rising from less than N600bn in 2010 to N2.7trn in 2012 [more than 50% of the country’s annual budget, and nearly three times the size of the annual capital vote], and dropping to just about an average of N1.2trn in subsequent years. Similarly the number of fuel importers, many of them revealed illegal entities, and a host of which collected subsidy claims for undelivered products, and or were involved in the practice of round tripping and over invoicing, shot up to more than 150 in 2011, and dropped to less than 50 after the January Uprising. Remarkably in spite, of this monumental fraud and looting of the treasury that was exposed, no significant action has been taken to identify, prosecute and punish culprits, much less recover looted funds. Additionally even though it is clear that such a grand scale and scope of treasury looting could not have been undertaken without the collaboration and protection of highly placed political officials as well as highly placed officials of the major public sector actors in the petroleum sector, including the NNPC, DPR, PPPRA, and Federal Ministries of Petroleum and Finance, up till this time no official has been implicated much less disciplined for these fundamental breaches. Furthermore, at the height of the January Uprising, and significantly during the negotiations between government side and the labour-civil society side, promises which have turned out to be outlandish had been made regarding not only identifying and punishing the corrupt, but also with respect to acquiring adequate domestic refining capacity within a three year period. Importantly the Minister of Petroleum Resources had said then that capacity utilization rate of the domestic refineries which she claimed stood at 40% during the crisis would be improved and increased to over 90% by 2nd quarter of 2014. The Federal Government which had stated that it would take about three years to build new refineries had also signed MOUs and granted licenses to build and complete by end of 2014 four so-called Greenfield Refineries through Public-Private-Partnership. Three years to the January Uprising however, all the promises made have not been realized, ensuring that the nation continues to be dependent on imported refined products for more than 80% of its requirements; the only OPEC member country to be so dependent. Outrageously, capacity utilization at the nation’s four domestic refineries is now reported to be at a mere 16.14% average, according to the latest data from the sector. And this is after the expenditure of a tidy sum of N152bn spent on failed Turn Around Maintenances [TAMs] of the refineries as at 2013. To make matters worse, none of the four Greenfield refineries have been built, much less operationalized. In point of fact not even the land has been cleared at the sites acquired since 2012 for these projects. It is the gluttonous greed of the ruling political elites, which drives their unprecedented levels of light fingeredness, leading to the routine frenzied pillaging of national wealth, which has placed an implacable obstacle on the part of combatting corruption, making the refineries work, building new refineries, thus achieving sufficient domestic refining capacity and doing away with the subsidy regime. The impact of the corruption in the oil and gas sector of Nigeria has been further accentuated in recent times by the crash in crude oil prices, and the revelation that we had depleted our savings long before the crash, and are thus right now on the brink of bankruptcy. The same impunity driven and aided corruption that is at the heart of the subsidy regime, is also at play in the mismanagement of our external savings. The External Reserves [ER] and the Excess Crude Account [ECA] created and established to cushion the country’s economy against the vicissitudes of the global economy, were ravaged in times of plenty so much so that now in times of need, we have almost nothing to fall back on. For instance both the ER and ECA which stood at $48bn and $10bn respectively at the end of December 2013 had been drawn down to less than $33bn and $3bn respectively even before the oil price crisis unraveled.
Posted on: Fri, 09 Jan 2015 23:48:17 +0000
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