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TheCable

Don’t increase fuel prices, it is a deadly trap for Nigeria (2)

January 13
08:20 2022

The argument that government will deploy the savings from the removal of ‘subsidies’ to improve health, transportation, and other areas of our national life is a gratuitous insult to the sensibilities of the people. We all know what has happened in the past with this sort of measure. Same ‘subsidies’ removed with the ostensible intention to improve the aforementioned areas goes instead to ‘subsidise’ the same well-connected fat cats in the name of consultancy fees, sweetheart contracts for supplies and construction which may not be delivered or shoddily implemented with huge sums gone.

Let us cut through all the gobbledygook about ‘subsidies’. The whole argument is not about economics; it is about international politics. Our government is sheepishly and disingenuously in hock to the International Monetary Fund (IMF) which is arm twisting our government to implement these toxic policies. And the all-clear impression is that the government would rather please the IMF than protect Nigerians. It is instructive in this regard that the minister of finance Zainab Ahmed chose the venue of a World Bank meeting to announce these measures. This after the IMF had earlier issued what amounts to a ‘’diktat’’ to our economic managers to implement devaluation of the naira and further down to remove ‘subsidies’ on the price of petroleum products in the country.

The question to ask is why would a group of pale-faced, blue-eyed folks sitting thousands of miles in the comfort of their offices in Washington D.C. far removed from the realities of our daily lives tell us what to do with our economy? And why would our economic managers not just accept these instructions without even negotiating with them but go ahead and try to implement them? The reality is that the IMF for all its supposed high horse is actually a tool in the hands of the United States of America to politically manipulate and control countries which it considers too weak to challenge it.

If the argument is about pure economics and the removal of “economically inefficient subsidies” in the system, then the IMF should look no further than the American economy. Boeing, the American aerospace company that makes the popular Boeing series of planes would be totally bankrupt were it not for the humongous subsidies in terms of above the odds defence contracts it gets from the American government. The same goes for big American defence contractors like Lockheed-Martin, Northrop-Gruman, General Dynamics, Raytheon, etc. American banks sitting on bad loans are routinely bailed out by the American government using taxpayers’ money. The entire American educational system is subsidised through all kinds of endowments and grants.

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Indeed the entire American economy is run not according to the principles of free-market which the American government hypocritically espoused, but by layers and layers of subsidies couched in such favourable terms as incentives, tax breaks etc. Why can’t the Bulgarian lady who runs the IMF ask the Americans to remove these subsidies embedded in the American economy in the interest of free-market capitalism?

To our government and economic managers who are trying to be more catholic than the Pope on the subsidy issue, why don’t they ask the Americans to first remove their subsidies before asking us to do the same?

Let us look at the oil prices which are the target of the IMF in Nigeria. Americans control about 70% of the global oil and gas industry. From upstream, midstream and downstream sectors of the global oil industry is in the hands of the Americans. They control the OPEC through Saudi Arabia their strategic regional ally. With their shale oil deposits, they have moved from net importers of the commodity to net exporters of it determining exclusively when and how the commodity reaches the consumer globally. Through the West Texas Intermediate and Henry Hubb price indexing they manipulate oil and gas futures markets globally. This means that even the price at which we sell our crude oil and gas and more importantly the price at which we buy it at the pumps is remotely controlled by the Americans.

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Given all these factors our government ought to consider very carefully the implications of heeding to the IMF demands for removal of subsidies. This is an election year and the country is at a delicate point. With the country at crossroads, nobody knows with certainty how the polity can withstand the current contradictions embedded within. For that matter, nobody can tell with certainty how the elections are going to pan out if at all we get to that point in 2023. We are battling with insecurity all over the country caused by socio-economic factors. Nigerians generally are groaning under harsh economic conditions.
The government ought to know if they don’t already know that heeding the advice of the IMF on subsidies is dangerous and deadly in this potentially combustible situation. It is a poisoned chalice by the Americans meant to achieve their long-term aim of destabilising and disintegrating Nigeria. I repeat it is not about economics but using economics to achieve its strategic goals in Nigeria by the Americans. It is throwing a lighted match into a tinder box of combustible materials.

What to do? Economics is subject to politics. In international politics, you get what you negotiate leveraging on your strengths. Nigeria is not a two bit country which can yield its economic policies to the IMF without negotiation. Our government must summon the courage to make clear to the IMF and Americans that our economic fortunes cannot be yielded just like that just because they say so. We should let them know asking us to implement such toxic policies is suicidal under the current circumstances unless they want it so. And if that is the intention we must not oblige them. And if the Americans think they can strangulate us economically because we deign to defend our economic and strategic rights, then we must also prepare to go for their crown jewels.

The Americans despite their superpower status are not without their weaknesses. Just like they did in destabilising countries around the world through their identified weaknesses, we must take the fight to America itself through the African Americans. If it comes to an economic and political war with the Americans we must enlist African Americans to be on our side.

It is our back-to-the-wall situation. The government must side with the people of the country and defend our economic and strategic interests or team with the IMF and the Americans and lose the people. (Concluded)

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Gadu can be reached via 08035355706 (SMS only)

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