Ecuador is, at least, 6,000 miles away in Latin America and the country is not better developed if not more underdeveloped than Nigeria to place it (Ecuador) in any position to offer Nigeria any lesson in economic development. Unfortunately, even if circumstantially, recent events in that country are such that offer Nigeria a very bitter lesson we can only ignore at our economic peril. France is another country some 4,000 miles away in Europe. If only because of that location, France is far better developed, more industrialised and more democratic than Nigeria.
It should, therefore, be understandable if France also offers Nigeria a lesson, again, we can ignore at our own peril. Focussing on France and Ecuador is imperative in view of the subtle and sometimes intimidating pressure to which Nigeria is subjected in determining the future direction of our country’s economy. Unlike any Nigerian head of government of his generation, President Muhammadu Buhari, on assumption of office in 2015, enjoyed an unprecedented honeymoon with fellow citizens bordering on virtually blank check to run the economy anyway he thought fit and at whatever sacrifice that might be demanded of Nigerians, as long as services and goods could be delivered. Hence, when fuel pump price was N97 and scarcity crept in intermitently and the only unofficial explanation was that, rather than improving, the situation might worsen unless fuel price was increased by almost 50 per cent, Nigerians raised no objection as fuel pump price rose to N145 per litre almost unnoticed.
Unfortunately, other local factors reckoned with to improve the situation never matched. There were the instability and irony in the international oil market. There were the widespread theories that fuel pump prices would reduce if Nigeria stopped importing refined petroleum products, since refineries in Nigeria had all collapsed. Among those who rushed to obtain licences to construct refineries, only, repeat only, Aliko Dangote is known to be remarkably performing and perhaps in the not too distant future might help in reducing importation of finished petroleum products. Meanwhile, the more prices of oil fell in world market, which ordinarily should reduce subsidy, the higher the the claims of oil importers in Nigeria, the very same people privileged to enjoy massive government patronage. Notably, their case is different from those in the pre-Buhari years, who in many cases never supplied oil to NNPC and yet were paid all over the place.
Despite the unpatriotic acts of these oil importers, their crimes are better handled by forensic auditors and the EFCC. Culprits should be well identified and prosecuted without any prejudice or favour. Such punitive measure should not even be remotely suspected by observing Nigerians to be partisanised. Even then, President Buhari must not yield in his resistance to International Monetary Fund (IMF) and World Bank on any prospects of withdrawing fuel subsidy or devaluation of the naira. First, Nigerians are part of world community. Depending on which country, standard of living is subsidised for the people. In United States, agriculture is heavily subsidised. In Britain, health is subsidised. In Scotland, whisky (of all items) is subsidised.
Buhari should, therefore, never allow himself to be persuaded that subsidy for oil and agriculture in Nigeria is some pampering. In any case, Nigeria has its history of stiff, indeed violent, resistance to fuel price hike. This does not make Nigerians peculiar or unwilling to make sacrifices, if such exist. Buhari is a living witness that when the situation warranted such sacrifice in his first year in office, Nigerians were easily forthcoming virtually without any complaint. But times have changed not just in Nigeria but all over the world, on all matters of cost of living.
That was the cause of the lesson Ecuador, today, offers Nigeria. Ecuadorian government caved in to pressure from IMF and World Bank. For two weeks after government withdrew fuel subsidy, violent protests erupted all over Ecuador and despite the presence of security forces everywhere, Ecuadorians refused to end their protests until, in clear desperation, government restored the subsidy to bring down fuel prices to previous level. Shouuld the Ecuadorian government have allowed itself to be so humiliated by IMF? After restoring the fuel subsidy, situation in Ecuador returned to normal. Buhari should order for full report on the attempted withdrawal of fuel subsidy in Ecuador.
The situation in France on the attempted withdrawal of fuel subsidy should particularly interest Nigeria’s Muhammadu Buhari. France is the home state of IMF just as America owns the World Bank. Fed up with the political status quo, French electorate, in May 2017, opted for somebody completely new, on the platform of a new party led by youthful Manuel Macron. He defeated candidates of the Gaullist party, the Socialist party and, of course, the rightist National Front. Newly elected President Macron, therefore, enjoyed a long honeymoon with the French until January 2019 when he attempted to withdraw fuel subsidy disguised as fuel tax. There and no more. The same French people who installed President Macron into office immediately formed the Yellow Vests Movement and for the next 28 weekends took over Paris and other commercial cities in violent protests against the fuel price increase or, more pointedly, withdrawal of fuel subsidy. Reckoning that the protest might not last, French President Macron, for the first few weekends, sent out armed troops to disperse the protesters. By the 24th weekend, it was a lost battle for the French president.
Three more weekends of unyielding protests of the people, President Macron not only withdrew his troops from Paris streets but also capitulated by withdrawing all his austerity measures, including the fuel price hike. Once again, IMF and its pro-fuel price hike agents only succeeded in pushing the government to be clobbered by people’s revolt. Who made IMF and World Bank enforcers of questionable regulations on the economies of developing countries? Why did IMF fail to enforce withdrawal of fuel subsidy in its home state of France? And the same IMF is intimidating Aso Rock to make life more difficult for poor Nigerians?
The other IMF and World Bank pressure Buhari must resist is any idea of devaluation of the naira. The immediate question is: “In whose interest?” Certainly, not ordinary Nigerians. Buhari must recall that, when he took office in 2015, exchange rate rose from under N300 to over N500 to the dollar. Remarkably, the exchange rate has since been stabilised at N360 to the dollar. The only criticism is that the exchange rate is subsidised by the government. So what? Is that not for the benefit of Nigerians than politicians and their collaborators in the private sectors who, otherwise, would be having a field day looting the treasury? If the naira is devalued by whatever percentage today, the immediate destructive impact will be in the various local markets, where prices of every foodstuff will be increased on the ground that “Buhari has devalued the naira.” Prices of ordinary services like hair barbing, patching of okada/Keke Marwa as well as pumping of vehicle tyre, transport fare, rents, etc, will go up astronomically.
Left free to float, the value of naira to the dollar will eventually rise to N1,000. Who are those to benefit? Nigerians who already piled millions of dollars abroad only to be importing $100 to fetch them N100,000. Where do the poor in society stand to gain in such opulent living of the new rich? The very poor for whose plight and seeming no hope Buhari publicly shed tears before he won elections in 2015?
The other potential beneficiaries of naira devaluation are the so-called foreign investors who will be flaunting investment potential of N2 billion for a mere $2 million. With federal and state governments still unable to pay the new minimum wage of N30,000 per month, will these governments not be triggering fresh demands for wages and salary review or indeed rise, in the event of devaluation or withdrawal of fuel subsidy? University lecturers, medical doctors, nurses, civil servants and of course members of National Assembly whose monthly earnings might rise from the present minimum of N13 million to a minimum of N40 million.
President Buhari should have no problem confronting those pressurising him to devalue naira or withdraw fule subsidy. They should tell him one country, including France, where such austerity measures were introduced without a blowback of violent public protests or inflation gone mad.