Monday, 16 January 2012

Nigeria unions suspend strike after fuel price cut

Policemen stand guard as angry youths protest on a street in Lagos, Nigeria, Monday, 16 January, 2012.
Massive street protests forced the president into a U-turn

Jonathan reinstated part of a subsidy on petrol, the scrapping of which was one of his key policies, and the u-turn may damage the credibility of a government already accused of being indecisive.
The suspension of strikes and protests by Nigeria's unions will come as a huge relief to ordinary Nigerians, especially those who earn their living from day to day.
It will also be a relief for the government of President Goodluck Jonathan that faced the strongest resistance from the Nigerian public since he took charge of the country.
It is equally a relief for the international community, who must have been concerned by the threat issued by the unions to shut down oil production - a threat that contributed to the surge in prices in the oil market.
But the most critical question is: Who won the battle between the Nigerian government and the unions representing the public? I suggest that the people have won.
They have won because the president had said the new price was not negotiable. The president had to backtrack, otherwise the unions would have undermined his authority. Young Nigerians were already talking about the "Nigerian Spring" on social networking sites such as Twitter, using the hashtag #OccupyNigeria.
Many of the critics of the subsidy are aware of the corruption associated with it - they know that a few individuals use the subsidy to milk the Nigerian treasury and amass enormous wealth. The mass protests are not necessarily about subsidy removal, they are about the deficit of trust in government.
Restoring that trust is the mountain President Jonathan now has to climb

The compromise still slashes the cost of the benefit to the government and leaves the way open to talks on phasing it out again later, but doing so may be much harder if Nigerians know they can reverse the unpopular policy by taking to the streets.
The protest had added to the administration's headaches at a time when it was already under fire for failing to take adequate steps to quell an increasingly violent Islamist insurgency in the north by militant group Boko Haram.
But the deal did avert a threat by oil workers to shut down production in Africa's biggest oil producer, a threat that had supported world oil prices.
However, the main umbrella union in Nigeria's second biggest city of Kano, in the north, said protests and strikes would continue there. Sporadic violence has been worst in Kano, where anti-government sentiment is currently riding highest.
Three people were killed and many wounded in clashes there last week.
Jonathan said fixing the litre price at 97 naira ($0.60) was a short-term response to ease hardships.
"In the past eight days through strikes, mass rallies, shutdown, debates and street protests, Nigerians demonstrated clearly that they cannot be taken for granted and that sovereignty belongs to them," Abdulwaheed Omar, president of the Nigeria Labour Congress (NLC), told a news conference.
"Labour and its allies formally announce the suspension of strikes, mass rallies and protests across the country."
When a price cap of 65 naira ended on January 1, pump prices more than doubled to 150 naira. The new cap of 97 naira still represents a 50 percent price increase since January 1.
The strikes paralysed Africa's second-largest economy last week and the oil workers union had threatened to shut down its 2 million barrel a day production.
Africa's most populous nation holds the world's seventh largest gas reserves but its infrastructure provides enough power to run only one medium-sized European city, meaning most of the country's 160 million people live without electricity.
"The government will continue to pursue full deregulation of the downstream petroleum sector. However, given the hardships being suffered by Nigerians, and after due consideration and consultations ... the government has approved the reduction of the pump price of petrol," Jonathan had said in a national broadcast earlier in the day.
According to the editor of New Generation Africa:  The problems with Fuel subsidy removal policy and the implementation process are clear cut:
*       Lack of planning on the Governments part before deciding, to lumber already struggling Nigerians with another financial burden.
*       Lack of support and provision of adequate facilities or infrastructures to help reduce the obvious impact the policy will have on food prices, transportation and disposable income of many households across the Country.
*       Extremely very bad timing for the implementation of fuel subsidy, January is a very difficult month for millions of Nigerians and that is the same for most people globally.
*       The process also lacks clarity and did not engage the populace and/or give them enough information to prepare them for the road/task ahead.
*       The current administration just like many before now lacks credibility in the fight against corruption.  The euphoria, hope and expectations of Nigerians after electing President Goodluck seems to have been faded into desperation, hopes dashed and expectations, what expectations they say, He is like the others.
*       Nigerians voted for Change and the change seems to be taking long and dreams are turning to nightmares.
*       The Government should lead by example; good housekeeping is expected from the administration to show a genuine commitment to change before imposing what looks like untold hardship on the ordinary citizens.
Despite all the problems, New Generation Africa and many financial experts (albeit that IMF and Washington are big supporters), believe the removal of oil subsidy is one of the best policies by the current administration and the best definitely taken by any Nigerian Government in the past 50 years.  Nigerians should be ready to make the sacrifices now for a better future and for the new generation.  Understandably Nigerians are tired of corrupt administrations, big promises and no action.
What the Government should have done:
v  Introduce the subsidy in phases to allow Nigerians to absorb the impact without breaking their banks.
v  Fuel subsidy should not be removed in January when many Nigerians are spent from Christmas celebration and struggling to travel back.  It shows lack of vision and total lack of connection with the reality in the street from the administration.  It is obvious that not many Nigerians get a budget allocation of two billion (seriously 2 billion naira, that’s a joke) to renovate their accommodation especially now, with all the economic gloom.
v  The Government also should as a minimum requirement, provide alternative transportation service for example a fleet of Federal and State owned Buses before removing the fuel subsidy. Two billion naira would go a long way, towards this type of project if properly thought out.
v  Adequate information should be provided by the Government based on the cost analysis, implementation process and very importantly the benefits of removing the fuel subsidy to ordinary Nigerians.
Unfortunately the events of the past eight days did nothing to help the Government put the case for removal of fuel subsidy. 
The Government now runs the risk of misrepresenting the best Policy by any Nigerian Government in the past 50 years. 
The outcome of the negotiations between the government and the Labour Union only goes to heighten the deep suspicion that the government paid of the union leaders.
The bottom line is that Nigerians must be prepared to support President Goodluck Jonathan and understand the need for a successful implementation of the policy.
The Government on their side must be willing to provide the citizens with adequate information and explains the benefits of removing the fuel subsidy to all Nigerians and in the language they will understand.
Nigeria needs better health care, new schools, new roads, new rail lines, investment in new technology, investment in skills training and the new generation.
Nigerians must understand that as difficult as it may seem, they need to go back to work and keep the economy going, they should also pay less attention to ill-advised Labour union leaders, who have done absolutely nothing to better the lives of working class Nigerians.  They are clearly uninformed, selfish and with little or no passion for the development of Nigeria or wellbeing of Nigerian citizens.
Finally Nigerians must let go of the past, give President Goodluck Jonathan a chance and they can judge him one year or two years from now. We do not have anything to loose, it can get any worse, it can only get better and patience they say is a virtue.  Removal of Fuel subsidy is good for Nigeria and will go a long way in fighting corruption that is crippling our great Country NIGERIA.
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