Buhari’s government and the economic inconsistency tag



On Sunday, the caucus of the Peoples Democratic Party (PDP), in the House of Representatives, through its leader, Hon. Kingsley Chinda in a statement offered a verdict that the current federal government under the leadership of President Muhammadu Buhari has been perpetually inconsistent in its economic programmes and policies. JOSHUA EGBODO reviews current issues around the new developments 


Beyond Reps’ opposition 


Outside the verdict of lawmakers of the PDP extraction in the House of Representatives recently, other citizens have been on rampage, especially on social media over the current state of Nigeria’s economy. The government has been roundly accused of being insensitive to plights of the people, who were already down by effects of the prolonged lockdown occasioned by outbreak of the novel coronavirus.
To many, the recent hike in electricity tariff and pump price of petrol, both considered to be essential commodities which support the livelihood of citizens on the ladder base of poverty in the country, was not the best at a time when purchasing power of Nigerians and other economic challenges were at downward jet speed.

PDP Reps’ opinion

Reacting to recent economic developments, the PDP House of Representatives’ caucus said President Buhari should as a matter of urgency, “reverse pump price of fuel and electricity tariff to meet the yearnings of Nigerians and realities of the moment”.
Rising from what it described as its 18th virtual meeting in the course of the ongoing lockdown, the caucus chaired by  Chinda from Rivers State noted that it reached the resolution after reviewing “issues of national interest”. It explained further that issues it wanted the government to review include the new stamp duties, telecommunication charges and Implementation of 7.5 percent Value Added Tax (VAT)”.
The caucus noted that “The COVID-19 pandemic has no doubt inflicted great hardship globally and has seen most economies fluttering.
“Most if not all responsive governments have devised innovative people-oriented interventions and opened new frontiers to reducing tax burdens on their citizens to stimulate their economies and cushion the unfortunate effect of the pandemic.
“Conversely, the Nigerian Federal government led by President Muhammadu Buhari has found this inauspicious time to implement what can only be described as strangle-hold economic policies on the lives of perceived helpless Nigerian citizens.
“More disturbing is the fact that the review in electricity tariffs and fuel prices is not commensurate with an increase in salary or income of the people”, describing the new pump price of petrol to be the third, since the commencement of this administration.


Noted inconsistencies 


It said “From an inherited pump price of N85 per litre, they (the Buhari government) have systematically increased it to an exorbitant, strangulating cost of N162 per litre. All these have been achieved without consultation or engagement with the Nigerian people, at whose pleasure he (Buhari) serves”
According to its statement signed by Chinda, the PDP caucus further recalled that “in 2015 when this government took over the mantle of leadership, cost of crude was N93.17 to 48.66 USD; pump price of fuel in Nigeria was N85 per litre and about N500 Billion was said to be paid as subsidy annually
“In 2020, crude sells for 39.68USD, the pump price of fuel is N162. Ordinarily, lower cost of crude should entail lower cost of fuel; At every increase, Nigerians are told that subsidy payment has been removed and that price of fuel will be determined by market forces.
“Paradoxically, in 2020 the government budgeted N450 billion for subsidy, whilst PPRA gave a realistic estimate of N750.81 billion, to be spent by NNPC as subsidy in 2020, higher than N500 billion even with almost 95 percent increase in pump price.
“Furthermore, President Buhari also promised to ‘Revive and reactivate our minimally performing refineries to optimum capacity and stabilise oil price’. This is a promise far taller than his imagined economic prowess. The state-owned refineries are operating at a ridiculous fraction of their capacities. Nigeria (an oil producing country) continues to import more than 90% of her finished products”.

Organised labour kicks


With the new tariffs technically in place, the nation’s organised labour centres have been up in arms, insisting that the hikes be immediately reversed.
Though President Buhari directed an immediate engagement of his relevant cabinet ministers and heads of agencies, reports were that no headway had so far been made, as at Tuesday.


Government’s justification


Understandably, the first attempt at justifying the hike in the pump price of petrol came through the Minister of Information, Mr. Lai Mohammed, who was quoted as saying  that “Despite the recent increase in the price of fuel to N162 per litre, petrol price in Nigeria remains the lowest in the West and Central African sub-region.” 
Also addressing a media conference in the wake of massive condemnation of the federal government decision to allow the hikes at this challenging time, Minister of State for Petroleum Resources, Timipre Sylva said government would in the coming month, introduce a vehicle and power generating plants conversion from petrol to liquified natural gas, which in his words would be cheaper as well as offer alternative to the regular use of petrol.


Positions faulted

However, the PDP caucus of the House of Representatives argued that “What Minister Lai Mohammed conveniently left out is the general rule that richer countries have higher prices for gasoline, while poorer countries and countries that produce and export oil have significantly lower prices. The difference in prices across countries is due to various taxes and subsidies they decide to impose, the caucus said.
“The Hon. Minister didn’t take into consideration the fact that most of these other countries with higher cost have functional and reliable systems in place – public transportation, power and social security for its citizens; their standard of living and minimum wage are far above Nigeria’s; have constant and affordable power supply, and their citizens do not depend on alternative power generation like Nigerians do with generators”.
Many analysts have also faulted Sylva’s theory of vehicle conversion, as they argued and questioned the feasibility, as well as who bears the cost of such conversions. Would it be a fresh burden on the already impoverished Nigerians? Is it going to be something the government would do? If the latter is in the affirmative, the question thus is where leith the wisdom of subsidy removal?


Would labour, others win the war?

It is no doubt that the majority of Nigerians have remained agitated over the new hikes, with the effects already being felt through prices of essential goods and services, but with all hopes that the organised labour and other groups’ interventions in the ongoing engagement would get the government to the side of the people. How possible? How soon? Why is consultation an aftermath of such a sensitive decision? These amongst others remained the questions, answers to which only time can provide.

Be the first to comment

Leave a Reply

Your email address will not be published.


*