On May 09, 2012, I posted an article on my Blog, Hailmiltonatlarge, titled "A Misguided Judgment: How President Jonathan and His Advisers Squandered a Golden Opportunity." Please, find some excerpts below, followed by a series of opinions posted on SaharaReporters in January 2012.
"Over the years, despite the skepticism or suspended judgment that I have in the petroleum subsidy scheme in Nigeria, I have always resisted the temptation to engage myself in the arithmetic of the funding methodology for an obvious reason: I hate Mathematics. Nevertheless, I am quite familiar with the basic principles of economics and strategic management. In a similar vein, I have a good understanding of the fundamentals of subsidy as they relate to pricing and competitive markets. Thus, it is reasonable to assume that when government intervenes in the market and helps to defray the cost of production or part of it, it makes the final product less expensive for the final consumers to buy than it would have been without the intervention or the subsidy. In the area of export, it enhances competitive edge in relation to similar products by other suppliers in the same market - foreign or domestic - because the subsidized products are cheaper to buy."
"Sadly, those assumptions do not hold water in our (Nigerian) domestic petroleum market in terms of availability and pricing. The more funding our government injects into the petroleum subsidy scheme, the more scarce petroleum products remain and the more expensive the final prices are at the gas pump. In hindsight, what I take away from the petroleum subsidy scam in Nigeria is that before we condemn the usual suspect - international financial institutions that we love to hate - for allegedly recommending deadly economic pills as a panacea for our sluggish economic growth, we must first ask ourselves whether the patients (African countries) administer the drug as prescribed by Doctor. "
"During the sit-in-protest that heralded the reported removal of petroleum subsidy by President Goodluck Jonathan in January this year, my concern was the long-term implications of the removal. I supported the removal, believing in my mind that something is inherently wrong somewhere that is preventing us from reaping the reward of the subsidy. The inability of the administration and those before it to eliminate the loopholes in the regulatory framework makes the continuation of the subsidy economically imprudent."
"I made my position public in social media [SaharaReporters], arguing that (1) if subsidy must exit, it should be handled by a separate and independent government institution and not private companies as presently the case, and (2) that it is economically unwise for Federal government to continue to subsidize importation of fuel on behalf of private companies, while they reap millions of dollars in profit. Finally, I referred to the current trends in the disbursement of student loans in the US, introduced by President Obama - an initiative that has saved the administration billions of dollars in student loans since its inception." - May 09, 2012.
Below, you will find some of the posts on "Saharareporters" during the Subsidy protest in the First Week of January 2012, where I advocated for the removal of petroleum subsidies. As at that time on January 05, 2012, Farouk Mohammed's report was not yet out. I nevertheless, supported the removal, arguing that a continuation is economically stupid because the subsidy has no positive impact on the prices of petroleum products at home. None of the organizers of the protest match thought of that. I was alone. And I was right. Saharareporters is my witness. Mr. Sanusi Lamido Sanusi, the Governor of the Nigerian Central Bank, echoed my position with unrestrained bravado publicly about two years later. The only difference is that when I advocated for the removal, I argued that transferring the responsibility to government agencies would eliminate the large-scale fraud perpetrated on NNPC by fraudulent individuals in the private sector. Please, find my comments below as published on Saharareporters during the protest match of January 2012.
In a news report by SaharaReporters, titled “Sorry Nigerians, But The Fuel Price Increase Has Come To Stay – Government” Published, on January 4, 2012 - 21:40, I posted this comment.
Submitted by Hamiltonatlarge on January 5, 2012 - 16:12.
“Hitherto, in the US Uncle Sam used to provide grants and loans to university students through the banks – they guarantee the loan, while the banks reap the interest accruing from the loans. That is no longer the case, the Department of Education, through the Financial Aid Offices in all the universities now prepare the loans and grants and disburses them directly to students. If Uncle Sam and the Department of Education are to bear the cost and forbearance of the loans or in case of default by borrowing students, they should as well take advantage of the interest being paid on the loans by students.” “[Therefore], it is economically stupid for the Federal government [of Nigeria] to continue to subsidize importation of fuel for people in the private sectors, while they reap millions of dollars in profit.”
I posted a similar message on Saharareporter's discussion board, I titled my shot piece, ‘There is Sense in the Removal.” In it, I urged President Jonathan to emulate President Obama’s new regulation in the disbursement and management of student loans in the US, adding that it is uneconomical for our government to continue the subsidy funding while private companies are in charge.
Below, you will find the title of an article originally written by Dr. Reuben Abati for the Guardian Newspaper, while he was with the Guardian, but reproduced by Sahara Reporters to lampoon him, followed by my comments.
“We Shall Start Stoning The Economists In Official Corridors.” – By Reuben Abati In 2009, but reproduced on January 5, 2012 - 01:34 by Sahara Reporters when Dr. Abati became the Spokesperson of President Jonathan.
See Part I and Part 11 of my post below:
"There is a sense in the Removal" - Part 1
Submitted by me, using the name of Blog, Hamiltonatlarge, on January 5, 2012 - 16:07.
"Hitherto, in the US Uncle Sam used to provide grants and loans to university students through the banks – they guarantee the loan, while the banks reap the interest accruing from the loans. That is no longer the case. The Department of Education, through the Financial Aid Offices in all the universities, is now responsible for preparing the loans and grants and disbursing them directly to students. If Uncle Sam and the Department of Education are to bear the cost and forbearance of the loans or in case of default by borrowing students, they should as well take advantage of the interest being paid on the loans by students.
It is economically stupid for the Federal government [of Nigeria] to continue to subsidize importation of fuel for the people in the private sectors while they [the private sectors] reap millions of dollars in profit."
"There is a sense in the Removal" - Part 2, January 5, 2012 - 16:06.
"What the Fed needs to do therefore, is to transfer the importation to NNPC or government agencies, so that the profit going to the private oil importers, as published by Senate last year, should be going to the government. The money saved will be reinvested into the sector. That is the only way that the Nigerian people will benefit from the removal. Removing the subsidy and leaving the importation in the hands of the same private sectors, is economically disastrous."
A few minutes later, another blogger sent this feedback to Saharareporters, reacting to my post, above.
Re: "There is a sense in the removal."
Submitted by dere (not verified) on January 5, 2012 - 19:13.
“Your piece makes sense but what beats me is whether our so-called advisers don't drill deep to consider all options with a view to proffering the best option for the people and the nation! Why do we have special advisers who are not specialists in their field? May the Lord help us indeed!” January 05, 2012.
Amen. May the Lord help Nigeria indeed.
When I contributed the pieces above, I had nothing to gain, but I had the Nigerian economy on my mind and how to revamp it and move it forward. And as President John F. Kennedy would say in his historic words, “Ask not what your country can do for you – ask what you can do for your country.”
Imagine if we had the audacity, integrity, and intellectual wherewithal to make the case for removal and just do it, eleven years ago? Thank God there is a President now at Aso Rock, willing to rewrite our history of docility. If Asiwaju is pushing a policy I advocated and stood for about a decade ago, it would be outright disingenuous of me NOT TO STAND BY HIM.
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