Unbelievably, Nigeria, Africa’s largest crude oil producer, imports petrol. But Nigeria’s fuel importers aren’t upset by the government’s 1st January cut of subsidies to the cost of petrol and kerosene imports. They’ve simply passed on their ‘loss’ to Nigeria’s 99% by raising prices 100% and more.
Joining furious demonstrators throughout Nigeria, the UK diaspora were outside the Nigerian Embassy in London in force on Friday 6th January. Everyone’s families back home are affected, said demonstrator Genevieve Flight, whether they drive a car or whether they’re one of the many communities and small businesses without mains electricity and relying on kerosene to fuel their generator. Bus and taxi costs have rocketed.
Why has the government ‘deregulated’ the fuel import business? Not for the reason it’s given, to release funds to develop Nigeria’s infrastructure. If the government really wanted to help Nigeria’s 99%, it would repair the four oil refineries that lie idle or idling. Refined oil products wouldn’t then have to be imported at sky-high prices set by the global market – in other words, by the global 1%.
Who are Nigeria’s fuel importers? According to London demonstrators, they’re entrepreneurs who, along with ministers and government officials, constitute the faceless cartel that controls Nigeria with one aim in mind – to put oil money in their pockets. Nigeria’s 1% employ flawless logic: if the four defunct and under-capacity oil refineries were repaired, there’d be no profit for fuel importers. Government officials and ministers are up to their elbows in oil. Many own filling stations. Many own oil blocks – oil extraction businesses – and are the local consortia to which companies like Shell sell contracts in order to make western oil extraction look less crudely colonial.
Zainab Hannafi, a post graduate student at Sussex University, said that the government’s new year’s gift to the nation was at the behest of the IMF and the World Bank, long time neo-liberal adversaries of Africa’s 99%.
Three months ago, the government recalled Ngozi Okonjo-Iweala, vice president of the World Bank, from Washington to join the Nigerian cabinet. She’s now finance minister. Saharareporters.com claim that she joined the cabinet on the condition that the government implemented IMF-directed deregulation. One demonstrator said that the World Bank was the evil genius behind the subsidy cut. Another demonstrator, Richard Idahosa, a visitor to London, said the IMF argument didn’t even make sense on its own terms. Foreign investors, which the IMF claims the Nigerian oil industry needs, should worry less about government regulation than about lack of security, zero government transparency and corporate litigation taking up to six years in the courts.
In 2005 Nigerians paid $12 billion dollars up front to western financiers to write off a $30 billion debt, having already paid them over $20 billion in debt servicing original loans of $17 billion. The 2005 deal included IMF ‘monitoring’ of the Nigerian economy. By September 2011, Nigeria’s debt had resurrected itself to the tune of $5.6 billion, the government’s Debt Management Office said. This amounted to a 20% increase since May 2011. Newsrescue.com reported that IMF Managing Director Christine Lagarde visited Nigeria in December 2011 specifically to pressurize Goodluck Jonathan to cut fuel subsidies. Jonathan, according to allafrica.com, promptly assured her that Nigerians had forgotten all about the bad old days of structural adjustment programmes.
Nigeria isn’t alone. The governments of Guinea, Cameroon, Chad and Ghana have all been under IMF pressure to cut fuel subsidies. The Ghanaian government has acquiesced.
Nigerians’ London demonstration was angry but peaceful. Anthea Omoregbee, resident in the UK for 19 years and paying her daughter’s Nigerian boarding school fees, said that everyone back home, not just the poor, are affected by the fuel subsidy cut. The middle classes can’t escape the domino effect of all round commodity and service price hyperinflation. Prince Oweh Omas, another UK resident, agreed with her. This is why, he said, the general strike that the trade unions started on Monday 9th January will be successful. Until the government changes its mind, no-one will go back to work, said Zainab Hannafi.
