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An Editor's Burden and Dilemma-An additional feedback

An Editor's Burden and Dilemma-A feedback

An Editor's Burden and Dilemma - An additional feedback
by Madaki O. Ameh

Dear Editor,

Thanks for the publication of my feedback. The discussion is really quite interesting, and in your reaction, you raised additional issues, which I would like to briefly address:

1. Whether people are suffering because of the large votes to government officials.

I raised this point of the huge votes to support bogus lifestyles of government officials because, such monies voted for frivolous expenditure is no longer available to be used for the good of all, and further fuels corruption, as they are not accountable for the way they spend such funds. Government officials should be paid for the work they do, and pick up their bills like everyone else, as is done in other civilized climes, but in Nigeria, when you come a public office, all your woes are piled on the government, to the detriment of the majority of Nigerians, which should not be the case.

2. Sharing of the Petroleum Subsidy among all Nigerians.

The point I made is that there is no subsidy on petroleum products. The perceived subsidy is the cost of government inefficiency in refining the product abroad at a huge, inefficient and corrupt cost, which must be stopped. The government should get the refineries in Nigeria working full blast, privatize them and encourage the building of new ones by the private sector. Even though I agree with you that building refineries is cost intensive, all other investments in the oil sector are, and all the government needs to do is not just to dole out licenses to their cronies, as they do for most things to further corruption, but to target such licenses at those who have the capacity to set up refineries, and back it up with the necessary incentives to ensure that they are built. For instance, if continued oil exploration in Nigeria by the major oil companies is tied to their setting up refineries to refine some of their crude oil output locally, and government grants 100% import duty waiver for equipment imported to construct refineries, and 3-5 years tax holidays for profits from refineries including generous capital tax allowances, I assure you that many investors will come to Nigeria to set up refineries. Similar incentives in the Telecoms sector has transformed the sector today in Nigeria, and most Nigerians are benefiting from the opening up of that
sector.

Petrobras purchased refineries abroad in the normal course of acquisitions because it was more cost effective to do so. Saudi Arabia has 8 refineries, with a daily capacity of 1.75m barrels locally, and an additional refining capacity of 1.6 million barrels through refineries they own abroad. This way, in addition to selling crude oil, they also earn foreign exchange from refining, which further goes to add value to the local economy through job creation and other multiplier effects. Government must not continue to invest in refineries because Nigerian governments have not been known to manage any business well, but they should encourage the private sector to do so through appropriate incentives as mentioned above. The challenge of sabotage which will be a disincentive to refinery investment in Nigeria is rampant everywhere, and Nigeria is not an exception, and should only spur the government on to do more to protect lives and property.

If you agree with me that there is no subsidy on petroleum products in Nigeria, but that this is just the figment of the imagination of government officials who want to pass on the cost of their own inefficiency to the average Nigerian who has no part to play in their corruption and inefficiency, then the point of sharing the subsidy among all Nigerians will not arise. However, if even for the sake of argument, there is a subsidy at the level of N400m - N600m per day as the Minister of State for Petroleum and the GMD of NNPC were contradicting each other the other day, sharing that amount among Nigerians will not make any difference in their miserable lives, as it translates to barely N5:00 per person per day. And the Nigerian government will be the last to do such a thing, when they are not even contemplating social security payments for the millions of unemployed. The government's argument that many Nigerians own more than one car and waste fuel is so myopic and unrealistic in today's Nigeria, when feeding is a huge challenge to most people. Maybe that is the fact for government officials who steal people's money.

3. Resource Conservation through Appropriate Pricing.

What leads to resource conservation and energy efficiency is not artificially high costs of the product, but a holistic look at the energy mix in a country, to create the right balance. If a litre of petrol starts selling for, say N300 in Nigeria and everyone apart from the politicians abandon their cars and start trekking or riding bicycles, that will not lead to conservation of the resource, but rather to an outright stagnation of the economy. The best way to conserve a resource is to exploit it in a sustainable manner, by using the proceeds to provide long lasting infrastructure, like power, good roads, a metro system, healthcare, support for agriculture, education, etc. All these things are lacking in Nigeria, and in spire of all the media blitz about reforms, etc, there is nothing to show that any genuine efforts are being made to provide these
infrastructure.

The much touted fear of resource depletion is misplaced because oil and gas are not our only resources, and the over reliance on this product is what has elevated it to an unrealistic pedestal and caused the laziness we have witnessed in Nigeria today. Let's have 100% resource control at the level of the real owners of the land, not the thieving Niger Delta Governors, as is practiced in the US, and you will see whether all the clamour for Federal Government positions will not come to a deserved end.

4. Impact of Privatization on Efficiency

I completely agree with you that the future lies in effective privatization, as government has no business doing business. I have always advocated this position actively, even when I was holding a Union position, and ever thereafter. The theories of private ownership and effective control of productive resources are all too sound to meet with any effective and intelligent challenge. The issue however, and what accounts for the resistance being put forward by the Unions, appears to be the corrupt manner in which the privatization exercises have been handled in Nigeria since inception. Apart from the fact that most of the enterprises are traditionally sold at gross undervalue, to the detriment of majority of Nigerians, those managing the exercise end up `selling´ the enterprises to themselves and their cronies, and the evidence to this effect abounds everywhere in Nigeria. Moreover, most of the privatized enterprises in Nigeria have not fared better than their previous comatose states because of the endemic corruption inherent in the system.

5. US Oil Consumption vis a vis Imports.

The Us currently consumes about 18 million barrels of oil per day, but produces about 8 million barrels, leaving a shortfall of 10 million barrels per day which they import. The US strategic reserve in Louisiana has a holding capacity of 700 million barrels, and this was set up by the regime of Ronald Reagan to act as a check on fluctuations in the international price of the product and its availability, which could cripple the US economy. It has nothing to do with the desire of the US to buy everyone else out before beginning to open up new reserves. If you follow the production of oil in the US well, you will discover that many wells in the US produce less than 10 barrels a day, but they are still producing them vigorously. The reluctance to open up the Alaska reserves to exploration and production has more to do with environmental concerns than a desire to conserve the resource. You must also remember that the US is actively involved in the development of other sources of energy, in order to effectively diversify their energy mix, and therefore create a situation which reduces dependence on one particular source. That is why coal, nuclear energy, wind energy and hydro are also major components of the US energy mix, as indeed that of most other forward looking countries. But in Nigeria, the coal mines are dead, the government has closed shop in the direction of investigating any other source of energy, all in the hope that oil will continue to be available for them to steal from the people of the Niger Delta and other areas where oil may eventually be found.

6. Corruption in Nigeria and the role of Labour.

I fully agree with you that the labour movement needs to do more than go on strike over fuel price hikes, and should consider the Ukrainian style of protesting corrupt and rigged elections in order to return power to the people, and that the threat of Police harassment should not be a deterrence. I believe that the labour leaders are listening, and will surely change their strategy, since it is obvious that the perpetual strikes have not yielded the required results. That appears to be partly responsible for the recent change in strategy of organizing rallies to protest the most recent increases, rather than the predictable avenue of strikes, with the crippling effect on the economy, which has been commended by all, including the government.

However, on this issue of corruption, there is a need for a full scale war, devoid of double standards. President Obasanjo has done really well in starting the anti corruption crusade these past six years, but beyond the rhetoric's and propaganda, Nigerians now desire to see hard results. The recent arrest of Gov. Alamiesigha in London is one of such results, but we are all waiting with bated breaths until he is sent to prison in London if found guilty. Then and only then, will Nigerians begin to take the fight against corruption seriously, because all these years, nothing tangible has been seen.

Also, in taking on this fight, President Obasanjo himself must be above reproach, in all ramifications, because if he is to have the moral strength to sustain the fight, his cupboard and wardrobes must be brought out and cleaned in the open. This is not all about pointing accusing fingers
without proof, because, asking the ordinary citizen who has no access to a security apparatus to provide proof of allegations of corruption against a sitting president, is to ask for the abnormal. It is like Obasanjo´s challenge to Nigerians to prove allegations of corruption against IBB or shut up, when he has all the apparatus of state at his disposal to carry out such investigation, in the same way as he has so ably done with the Abacha family over the years. If people are not to perceive his anti corruption exercise as selective, he must pursue it with the same fervour against everyone, and not take any allegations, including the ones made against himself and his family members as frivolous and dismiss them with a wave of the had, as he always does. Without going into details of the requirement of proof, the following actions of the President, which have not been denied and is in the public domain, fall far short of the public image deserving of an anti corruption crusader, and he owes Nigerians at least an open and transparent explanation, beyond the feeble ones being made by his apologists at the moment:

a) His Presidential library launch, at which the State Governments each `donated´ N10m of people's money, and the organized private sector also donated obscene amounts, totaling over N7 billion. If this is not abuse of office and corruption, I am yet to find another word for it. When he was sued for this action by Chief Gani Fawehinmi, SAN, all he could come up with as defences was to assert that the Library belongs to his foundation and not to him (corporate personality), and Presidential immunity, a constitutional provision which he has openly reviled in all his public posturing. One would have expected the President to be consistent in his public and private utterances, and not hide behind feeble defences when faced with such a moral crisis. As we speak, the lure of keeping the funds has not allowed him to do the honourable thing of handing that money back to the donors or to the Federal Government.

b). The granting of a Private University License to himself while sitting as President of the Federation. This appears to be the same sort of abuse of office about which he has accused Orji Kalu of Abia State, when he set up Slok Airlines, which was eventually grounded.

c). His confession that he earns N30m from Ota farms monthly. He has not told Nigerians who his customers are, and how much he was making from Ota Farms before he became President. A transparent President would lay the
books of the farm open for inspection and a full investigation. Such a President would also lay bare the source of funds he used to set up the farm in the first place, since we all know that if he saved all the money he has ever earned since he became an adult, it would never be able to acquire the land, not to talk of setting up the infrastructure.

d) A firm position on the allegations of corruption leveled against his children and members of his wife's family. Loosely asking the EFCC to investigate, and the quick manner in which government mouthpieces like Fani Kayode come out to defend the President and his family, smacks of a desire to cover up, and when such conclusions have been drawn by government spokesmen, who speak for the government, one wonders what alternative conclusion the EFCC, another agency of government, is expected to reasonably come to.

I am sure you will agree that the above examples I have cited should not lead to requests for documents in proof, as they are all public knowledge, and should therefore not qualify to be classified as beer parlour and pepper soup talk. The problem is that Nigerians have a habit of trivializing issues of corruption, especially when it pertains to their leaders, without realizing that once you agree to hold public office, your entire life is open to public scrutiny 24 hours a day, and nothing, no matter how
frivolous, should be swept under the carpet.

I hope that I have sufficiently addressed the issues you raised, and thereby furthered the cause of this very interesting discourse, and I praise your courage and patriotism in the path you have chosen to contribute to the advancement of our country and the collective good of all of us.

Editor's Response

Dear Mr. Ameh

Whether people are suffering because of the large votes to government officials.

We agree with you that government official be paid no more than they deserve. This includes money to operate and maintain the office which they occupy. To us, if it takes N350m to operate the office of the Senate President and the country can afford it, that is what should be made available. However, if an official pockets any of this amount for any reason other the reason for which it is voted, that is a fraud. Sometimes such money might be voted with the hope of the reward it will bring to the country. We need to demonstrate first that there is no merit to this large sum in the long run. Right now, we can only assume that the need was clearly demonstrated before the award, and the benefit to the country is several folds than the money voted.

Sharing of the Petroleum Subsidy among all Nigerians.

We agree with you on the need to refine Nigerian crude at home, however, looking at the records of other countries and the consumption habits in Nigeria, there is no amount of home crude refineries that may seem to be capable of quenching this emerging appetite for gasoline. There is clearly a large sum of subsidy admitted by both sides on petroleum products in Nigeria. Our only concern on this issue is about equity. If we stay away from George Orwell's Animal Farm, we will like to see all "Animals" equal without any corollary later attached. Distribute the money for subsidy equitably as we previously argued.

Resource Conservation through Appropriate Pricing.

Again, without re-inventing the wheel, when America was besieged by OPEC, they put into place Taxes on Gasoline as part of the measure to conserve this precious commodity. Higher prices got many people on the subways, and even now, people are advocating efficient non-gas guzzling automobiles as part of the ways to conserve. We are not sure refining at home will cure the need to conserve in future. We need to prepare Nigeria for what may happen in future.

Even if you are right, and Nigeria gas is inexhaustible, at least for the foreseeable future, can you imagine what that will do to Nigeria in 30 years if we are one of the only few countries still with oil? The powerful one will descend on us to cart away whatever is left. All they have to do is to trump up a reason for coming to grab our oil.

We need to start right now an art of surviving. Head or Tail, we may wind up losing. The only guarantee for surviving is to look at conservation as one option. The big powers, east or west will find a way to go after what they need, we at the NigerianNews hope we will not be caught napping because it will happen, it is just a matter of time.

Impact of Privatization on Efficiency

We agree on this one

US Oil Consumption vis a vis Imports.

"It has nothing to do with the desire of the US to buy everyone else out before beginning to open up new reserves."

Considering the exhaustible nature of this product and the new entrants to big oil consumption like China and India, it is prudent for the US to exhaust non US oil before she gets to hers. Once Nigeria becomes like the US in terms of consumption, she will also need to find a reliable source. The new entrants by the way come in as a result of industrial success. So, we hope Nigeria will become that successful soon. However, we also hope for diversification for so many reasons, including the sure curse on a poor defenseless country who holds the last reserve coveted by the powerful nations.

"The reluctance to open up the Alaska reserves to exploration and production has more to do with environmental concerns than a desire to conserve the resource."

We are sure you are aware of what the Congress has just done to that? Bush and the Republican party have made this argument redundant. If you look at the reason why, you will find it is a developing story of things to come. In case it becomes not very easy to grab what might be left in future somewhere else, Alaska is there in a future desperate for more of this non-renewable source of energy.

But we can assure you it is a good policy for America to keep on buying from abroad right now so that she won't have to go to war over oil later. She can defend herself, so for her, it is better for her to be the last nation with oil. We are sorry for a defenseless country which may still have oil after the American oil has been depleted.

Corruption in Nigeria and the role of Labour.

We substantially agree here, however, we are not too sure we can come to the same conclusion on (a) without knowing how the money was obtained from the mentioned sources. It is NOT immoral to raise fund for a presidential library! Our problem is that most of the people who criticized the Library money raising could also turn the searchlight on how the presidents in the United States raise money for their libraries. The United States Presidents start raising money while they are still presidents through their Presidential library committees. The bottom line is that, it is easier to raise money while you are still a president than when you are no longer in office.

If you claim that Nigeria is too poor to let that kind of money flow to a Presidential library, you will be right. But these contributions were made in the tradition of the American Presidential Library fundraising voluntarily as far as we know (whether that is right is another story), and as we could see, no poor people contributed except the contributions through the state officials. However, nobody has been able to uncover any pressure from the presidency on the State Officials who contributed. We must all stop the tradition of accuse first and find out later. If we at the NigerianNews discover that President Obasanjo pressured these people to contribute, we will be out in force to indict such attitude. This clearly for now, and as far as we are concerned here will not be counted as corruption or immorality (although in a poor country like Nigeria, there is such an appearance). Please Mr. Ameh, let us know about any other information you may have other than the one above. Specificity is the right word for us here.

(b) The granting of private University licence ordinarily looks bad if not done according to the law. However, it is the responsibility of the Federal Ministry of Education / National Council for Education Planning based on their criteria for awarding a university to expose the excesses of the president on this issue if there is any excess. So the first place of call would be this body, to ask what led them to award a University to a sitting President. Were they bribed or intimidated? Did the president influence the Council in awarding the University? Did the president operate his business according to a guideline laid down for a president in the constitution? Is he running his business through a blind trust and the trustees acted on his behalf in accordance with the rule governing blind trust? These are the information we have to know here at the NigerianNews before we make comments on this issue. At any rate from what we are hearing from the grapevine, he may have denied being the owner of this University. However, the same grapevine tells us that he sat on the board of the governing body of Bell "System" prior to being president, and that according to this source is the extent of his involvement.

(c) "His confession that he earns N30m from Ota farms monthly." He doesn't have to (i.e. confess)! That is your job and our job. Once we find out that he was lying, then we can call him a liar. He has said what he makes, it is now up to you and us to prove that he is lying if that is important to us. What do we gain if we call him a liar first and later find out he is telling the truth? At any rate when does making N30m at his farm become corruption? Are we naive enough to think that is impossible? What about those who just want to come to the farm to buy just because they will like to meet the president there? Should a president fold up a business once they become president? If that is what the law says, that is what should happen. A president who is allowed to operate a farm while he is in office should be expected to make even more than N30m for obvious reasons.

(d) If not EFCC, the next body and in law the only body which can investigate the president according to the constitution is the National Assembly. However, from what we know of this body, this quickly will soon become a PDP family affairs after several bags of Ghana-must-go, and even perhaps, because of the disruption an impeachment hearing will cause in an ethnically divided polity like ours. So, for now, we believe Ribadu should be alright for the job until we have reasons to impugn the reputation of this seemingly bright gentleman.

Mr. Ameh, we are very sure we have invited on ourselves a new round of name calling. However, since what we are doing at the NigerianNews is to show how to go about things without calling people names prematurely, we stand by our discussion above.
[back to Editorial page]

"Petrobras purchased refineries abroad in the normal course of acquisitions because it was more cost effective to do so. Saudi Arabia has 8 refineries, with a daily capacity of 1.75m barrels locally, and an additional refining capacity of 1.6 million barrels through refineries they own abroad. This way, in addition to selling crude oil, they also earn foreign exchange from refining, which further goes to add value to the local economy through job
creation and other multiplier effects. Government must not continue to invest in refineries because Nigerian governments have not been known to manage any business well, but they should encourage the private sector to do so through appropriate incentives as mentioned above. The challenge of sabotage which will be a disincentive to refinery investment in Nigeria is rampant everywhere, and Nigeria is not an exception, and should only spur the government on to do more to protect lives and property."