NIGERIA: Billions Siphoned by Corruption Could Have Been Used to Maintain
Fuel Subsidy
By Mustapha Muhammad
KANO, Nigeria, Jan 11, 2012 (IPS) - As a nationwide strike and protests
against the lifting of the fuel subsidy paralysed Nigeria for the third day
in a row Wednesday, analysts say the billions of dollars a year lost to
corruption in the oil industry could have been used to leave the subsidy in
place.
"We know that because of the corruption and irrelevant people placed in
certain key positions in the sector, a lot of crude oil is being lost,"
Garba Ibrahim Sheka, a senior lecturer in economics at Bayero University in
the northern city of Kano, told IPS.
Nigeria has some of the lowest fuel prices in the world. But a majority of
the population lives on less than two dollar a day, and the removal of the
fuel subsidy since Jan. 1 has hit the poor hard by more than doubling petrol
prices and transport fares and driving up the prices of foodstuffs and other
commodities that are transported from one region to another.
"This federal government policy comes at a time when the unemployment rate
is high: over 40 million people are unemployed" in this country of 158
million, Sheka said.
"The social impact is that Nigerians are getting poorer, and the poorer they
are the more insecurity we have. We expect socially that there will be more
poverty, more hunger, and more social problems like armed robbery and this
problem of
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ould-have-been-used-to-maintain-fuel-subsidy/%22http:/ipsnews.net/news.asp?i
dnews=106354%22> Boko Haram," he added, referring to a militant Islamist
sect that has carried out attacks and bombings over the last year that have
claimed a number of lives.
The decision by the administration of President Goodluck Jonathan to lift
the fuel subsidy drove the price of fuel up from 65 naira (35 cents of a
dollar) a litre to 150 naira (93 cents) basically overnight.
The government of Africa's top oil producer said the 7.5 billion dollars
spent every year on fuel subsidies could be used to provide desperately
needed infrastructure.
Central Bank Governor Lamido Sanusi told reporters in Kano that "The monies
will be used in provision of social amenities and infrastructural
development that will benefit Nigerians more and save the country from
economic rift."
The authorities in Africa's most populous nation also say subsidised fuel is
smuggled into neighbouring countries where petrol prices are higher, thus
depriving Nigerians of the benefits from the subsidy.
"The subsidy, which runs over one trillion naira, has been shared with
neighbouring countries like Chad, Niger and Cameroon," Abdullahi Umar
Ganduje, deputy governor of Kano state, told IPS.
Nationwide strikes and protests
The lower house of parliament held an emergency session on Sunday Jan. 8,
urging the president to suspend the decision to slash the fuel subsidy, and
calling on the trade unions to cancel plans for an indefinite strike.
But the government stood by its decision and labour unions, students,
academics and activists went ahead with the strike and mass protests on
Monday.
Up to 10 people were reported killed and many more were injured in the
protests as police used live ammunition in some states to disperse
demonstrators. "We rushed some victims with gunshots wounds to Nassarawa
Hospital. A total of 30 protesters were injured," Musa Abdullahi, the head
of the Red Cross in Kano, told IPS.
A local human rights group, the Civil Rights Congress, condemned the use of
excessive force by the police.
Millions of protesters have been taking part in the nationwide
demonstrations, marching down the main avenues of the cities chanting
anti-government slogans. Most other streets are deserted and shops are
closed. In the northern state of Kaduna, two former governors are leading
the protest.
"We are not afraid of police brutality and we shall continue with the
struggle to the death," one of the protesters, Kabiru Musa, told IPS at a
demonstration in Kano.
Economic losses
"The impact is going to be devastating; if all the sectors are shut down the
government is going to lose billions of naira," said Sheka, at Bayero
University.
"The longer the strike drags on, the more negative the impact on the economy
and the social impact will be," said the academic, adding that the
government should keep in mind the recent experiences of governments in the
Middle East and should be "wise enough not to allow this to happen."
Official government figures put crude oil drilling at 2.09 million barrels
per day since the Niger delta amnesty deal for militants, aimed at reducing
unrest in that oil-rich region, went into effect in 2009.
But analysts accuse Nigerians working in the oil industry of conniving with
multinational oil companies, and depriving the country of revenue.
"We believe that if 'leakages' can be mended definitely, a lot of money can
be realised from the area," Sheka said.
Nigeria imports refined petroleum products to meet domestic demand, because
the country's four refineries are not functioning at full capacity.
Rising wave of insecurity
Curfews have been announced in the northern state of Kano and other parts of
the country, and a state of emergency has been declared in some parts of
four states: Borno, Yobe, Plateau and Niger.
But the measures have failed to calm protests and quell attacks. Bombs
exploded in Borno and Yobe, suspected to be the work of the Islamist
militant group Boko Haram. And no fewer than 25 people were reported killed
in attacks on churches in Gombe and Adamawa, in the troubled northeast.
An attack on a mosque in Edo State in southern Nigeria was believed to be
carried out in reprisal for the church bombings.
(END/2012)
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Received on Wed Jan 11 2012 - 18:13:25 EST
