“THE POOR CAN NO LONGER BREATHE”
PRESIDENT TINUBU’S ECONOMIC REFORM IS AKIN TO A DOCTOR DRAWING BLOOD FROM A HAEMORAGHING PATIENT
If a poll is conducted in Nigeria today asking average Nigerians how they have fared since May 29 when President Bola Tinubu came to power, the prevailing answer is likely going to be a tale of suffering, hardship and misery. Such is the scale, rapidity and magnitude of the attacks the new administration has unleashed on poor Nigerians, the working class and layers of the middle classes through its so-called economic reforms.
By HT Soweto, NEC Member, Democratic Socialist Movement
On May 29, as former Lagos State governor and ruling All Progressive Congress (APC) chieftain Tinubu was being sworn-in at Eagle Square Abuja, he declared “fuel subsidy is gone” – in a daring move that has now been revealed to be an off-the-cuff remark – that is, a reckless and irresponsible step that was neither discussed let alone any mitigating plan prepared! Immediately, the fuel prices rocketed from N195 per litre to at least N500 per litre as hapless Nigerians raced to the nearest petrol station to stock up! Also society came to a halt as transport prices shot up and many workers and students were stranded at bus stops unable to afford the new fares. Weeks after, many workers are still trekking to work while a number of state governments had to announce a reduction of the working week to three days! This anti-poor policy, which has been in the works for nearly three decades, was followed by a raft of others including naira devaluation and a plan to introduce tuition fee under the guise of students’ loan all of which have had the combined effect of unleashing a cost of living crisis that has sent inflation soaring and living conditions crashing.
From factory workers to civil servants, traders and artisans, lawyers, lecturers, students, doctors and bank workers, Nigerians are crying. A recent Daily Trust Saturday report of how Nigerians are coping with President Tinubu’s economic policies revealed the following: A security guard in Kaduna State, Babangida Abdulmomin, said he could hardly afford to eat three meals a day. “I want to eat three times a day, but it is difficult due to the rise in food prices. In the past three days, I couldn’t even have dinner. I can only manage to eat twice a day, so life is difficult,” he said (Daily Trust Saturday, June 23, 2023). In a similar vein, Aliyu Ahmed, who sells dry pepper at the Central Market in Bauchi State, said “the hike in the pump price of petrol has caused the increase of prices of commodities and we now witness poor sales, making the market very difficult to run as the little sales are being depleted by high cost of living. My greatest fear is the possibility of consuming our capital”.
These are just snippets of the real situation on the ground. Meanwhile, Nigeria is not a stranger to poverty. In 2018, the resource-rich country, which is the seventh largest exporter of crude oil in the world and Africa’s largest economy, was declared the poverty capital of the world. 133 million Nigerians, over 60 percent of its estimated 220 million population, are said to be living in multidimensional poverty. But since May 29, millions of poor and working class families have suddenly found themselves in new levels of misery and deprivation. Even the World Bank, the major promoter of the same anti-poor neo-liberal policy, has had to reveal, albeit conservatively, that 7.1 million people would be pushed more into poverty as a result of the hike in petrol price. Though it incorrectly expects that a palliative arrangement will prevent such a development (Punch June 28, 2023). The fact is that the situation is acute and it is still rapidly deteriorating. There is every possibility for pent-up rage to explode in any form – something which the youth restiveness and gang violence these past weeks in Ajegunle, a slum in Lagos State, already indicates.
From every indication, the economic shockwaves of the capitalist reforms are only beginning to manifest across sectors of the economy. The scale of the devastation will only register fully on the economy over the coming months. Be that as it may, latest figure from the National Bureau of Statistics (NBS) which puts inflation at 22.79 percent, a 17-year high, already suggests the direction the country is travelling. This inflationary trend just like previous cycles is being driven by high food and energy prices. According to a report by Bill and Melinda Gates Foundation and Ukaid, most Nigerian homes spend 85 percent of their income on food consumption. UNICEF has declared that at least 25 million Nigerians face famine this year. The interaction of the effects of fuel subsidy removal and naira devaluation with flooding, climate change and the insecurity that grips farming communities in the middle belt of the country is likely to push food prices further upward.
Similar adverse situation is already taking place in the manufacturing where cost of production is rising astronomically. Although the Manufacturers Association of Nigeria (MAN) hailed the unification of exchange rate with the hope that this will eliminate middlemen and speculators, the consequential devaluation of the naira by over 67 percent, as of mid-July, has placed before manufacturers’ new dilemma. First, it has impacted production cost severely with the price of energy, imported machineries and others rising astronomically in the past few weeks. It has also increased the value of private sector debt valued in foreign currency thereby placing a few producers in precarious situation with the possibility that a few companies may collapse in the next period leading to job losses. Secondly, the rising inflation means the value of income has collapsed further leading to low purchasing power. In this situation, producers are faced with the dilemma of how to pass on the full burden of the crisis by raising prices without risking a complete lack of sale. A case in point is the Association of Master Bakers and Caterers of Nigeria (AMBCON) which recently announced plans to once again increase the price of bread by 15 percent. Their reasons include the following: “The recent general increases in our factors of production include, but not limited to additional N1.2 million on one truck of flour (N2, 000 per bag), N3.6 million on a truck of sugar (N6,000 per bag), yeast additional N2,000 per carton, fuel from N205 to N550, diesel N650 to N700.…,” (Daily Trust July 13, 2023).
With purchasing power abysmally low thereby limiting consumer spending, increasing commodity prices will soon be seen as a not so effective way out for producers. This is because increasing price at a period when workers and the oppressed masses, the bulk of consumers, are poorer is, to put it bleakly, like cutting your nose to spite your face. The result is that many goods will not be bought thereby leading to a huge loss. Instead, many producers will turn towards cutting wages and downsizing their workforce in an attempt to maintain profit margin, at a period when unemployment is already at about 40 percent. This however will not be limited to the private sector. Downsizing and mass retrenchment are also likely in the public sector at some point. This is because of the fragile fiscal situation at all levels of government due to corruption and mismanagement – something which could be further worsened by the effects of the current crisis. At least, around 15 state governments are yet to implement the N30, 000 minimum wage four years after it was signed into law. Many states are owing workers and retirees backlogs of salaries and pension. Over the past one decade, both federal and state governments have managed to ramp up enormous debt which the Debt Management Office (DMO) put at N46.25 trillion or $103.11 billion at the end of December 2022. This is expected to balloon to an unprecedented N70 trillion by the end of the year, according to analysts at Meristem Securities Limited. Although a big proportion of the Federal and State Government’s debts are owed to domestic lenders including the Central Bank of Nigeria (CBN), the component of the debt in foreign currency, put at about 40 percent, is also significant. Therefore, a greater sum would be required for debt servicing than even before, causing a further distortion in budgets and therefrom difficulty in meeting up with monthly statutory expenditure including payment of wages.
These neoliberal and capitalist economic policies are being driven by a powerful propaganda machinery that has tried to present the suffering as an inevitable consequence of growth and economic progress. An example of this is how President Tinubu tried to show empathy while speaking to a group of former governors recently. “I understand that our people are suffering, yet there can be no childbirth without pain. The joy of childbirth is the relief that comes after the pain. Nigeria is reborn already with fuel subsidy removal. It is a rebirth of the country for the largest number over a few smugglers… I know it pinches and it is difficult. In the end, we will rejoice in the prosperity of our country,’’ (Daily Trust July 12, 2023).
Tinubu’s empathy however rings hollow considering his lavish lifestyle which has even increased to appalling level since he came to power in May. During the recent Sallah break, Tinubu rode into Lagos with a convoy of official vehicles numbering over hundred all of which were fueled by taxpayers. So far he has not bothered to reduce the air fleet under the presidency and just weeks ago, he sent a supplementary budget to the National Assembly with a bribe of N70billion to “support the working conditions of lawmakers” (PremiumTimes, July 13, 023). Besides, the billions that the government continues to cost the country despite the appeal to the masses to tighten their belt is the greatest demonstration yet of the insincerity of the capitalist elite.
They also say the suffering will be temporary but this is not given considering the no-colonial character of Nigeria as well as the unrelenting crisis of capitalism on a global level. So far, neither fuel price nor the value of the naira has shown sign of improving. While since the subsidy removal, the national average price of petrol settled at N500 per litre, there are indications that it may occasionally go beyond that. On Tuesday 18 July 2023, motorists reported petrol price jumping to N617 per litre at the pump. At the moment, the capitalist elite is staking everything on the Dangote refinery saving the day but this huge monopoly has so far remained un-operational despite the promise that it would start refining fuel by July. But even if it becomes operational, all that may happen is a slight drop in pump price of fuel. Any expectation that fuel will sell below N200 per litre appears completely ruled out. This is because the combination of naira devaluation, high production cost, the prevailing world market energy prices and the profit-motive of Dangote’s business empire would be the ultimate determinant of what prices would be fixed. In other sectors like cement and noodles where Dangote enjoys similar near monopoly status, prices of these commodities have always gone up rather than down.
The same goes for the floating of the naira. Against the prediction of capitalist defenders, the currency has continued to crash in value. The effect has been damaging not only for the working people and poor in Nigeria but also for Nigerian students in the diaspora who were forced to emigrate in search of quality education and greener pasture. A recent report by Punch newspaper (July 12, 2023) shows that Nigerian students in the United Kingdom face the prospect of loss of admission, dropping out and deportation because of how the collapse of the currency has increased the naira equivalent of their fees by about 60 percent! Many of these students may now struggle to pay the balance of their tuition due to the sharp decline in the value of the naira. By September and October which is the period when new school year opens abroad and newly admitted students pay tuition fees and buy plane tickets to travel, the consequential increase in the demand for dollar and pounds may send the naira value crashing further, something that may prompt an intervention by the CBN under whatever guise.
IT DOESN’T HAVE TO BE LIKE THIS
To be clear, our critique of Tinubu’s capitalist economic reform should not be interpreted to mean Socialists do not agree or understand that Nigeria is in as serious mess which needs strong measures to tackle. In reality, we are the first to recognize that Nigeria is in crisis and strong measures are needed to begin to rescue it. Where we differ however is: who pays for the crisis, the longsuffering workers and poor masses or the tiny rich elite who have taken for themselves the commonwealth of this country?
By removing fuel subsidy and devaluing the naira, the regime claims to have blocked fuel smugglers and currency speculators who have been making billions at the expense of the country. However, this only transfers the axis of exploitation from one layer of thieves (fuel smugglers) to another (petrol marketers). This time around, Nigerians are now at the mercy of petrol marketers who have taken to price gouging in order to better profit from the deregulation of the fuel market. By the time Dangote refinery becomes operational, a country of 220 million people would be at the mercy of one man for their energy needs! The same goes for unification of the exchange rate which has led to soaring inflation and further distortion in the economy. The reality is that any solution to the crisis plaguing Nigeria can only succeed if it goes beyond the precinct of capitalism. So far it remains within the precinct of capitalism; it will only solve one problem while creating 20 new ones.
Policies like fuel subsidy removal do not address the root cause of the mess. That is why instead of ending the crisis, they produce new one while increasing the suffering of the workers and poor. We Socialists demand instead that the rich who are responsible for the mess should pay for the crisis. This is why we call first and foremost for a reversal of the fuel price, arrest and trial of all subsidy thieves and seizure of their assets, a crash programme to repair old refineries and build new ones and nationalization of the oil and gas sector under working people’s control and management. By nationalizing the oil sector, we want all private profit interests (including local and multinationals) eliminated to permit the full utilization of Nigeria’s oil and gas resources for the benefit of its population. By linking this key measure with nationalization of all other key sectors of the economy like the banks, big industry and mines all under workers democratic control and management, it can be possible to implement a Socialist plan to take the country’s wealth off the one percent and instead invest it massively in banishing illiteracy by funding public education and healthcare, banish poverty and unemployment by expanding industry and creating decent jobs on a mass scale, modernize public infrastructure, rebuild the agricultural sector and expand food production to end hunger, protect the environment, invest in renewable energy sources and build decent conducive homes for all while paying a living wage that can ensure not only improved living standards through reduction of working day and better work conditions but also a happier and more fulfilled life for the mass majority something which only the rich enjoy today.
Rejecting Buhari’s failed mix of neo-liberalism and state intervention the Tinubu regime has opted for an all-out neo-liberalist offensive. It presents the case as if the only course of action that is required to correct the mess is to impose policies that will push people further into poverty. But this is not true! The only reason why President Tinubu cannot take the above-outlined steps is because they go against the interest of capitalism. But these are the only measures that can ensure that the workers and poor who have always suffered do not suffer the more and that Nigeria is truly rescued.
Labour must challenge the ruling elite orchestra that there is no other choice by posing a clear alternative. Unfortunately, the retreat of the leadership of the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) from continuing with the general strike initially called on June 1st to resist the subsidy removal has helped to embolden the regime. But this can be overcome if labour changes course and calls for a 24hour or 48 hour general strike and mass protest now as a starting point of a well mobilised nationwide resistance against the ruinous policies of the regime which is causing enormous suffering. This has become urgent seeing that the negotiation with the Federal Government for palliative is clearly not going to yield any concrete outcome for the working people.
Labour was correct to have flatly rejected the unilateral offer of the regime to pay N8000 each to 12 million vulnerable families over the next few months. This conditional cash transfer is part of a suit of International Monetary Fund (IMF) and World Bank facilities for the country to cushion the effect of the subsidy removal for which the regime is requesting a new loan of N500 billion. Reacting to this, the chairperson of the Lagos state council of the NLC, Funmi Sessi said, “Looking at the money and the effect of the subsidy removal that has escalated the prices of everything in the market, I wonder what the N8,000 can do for a family in a month. I wonder what it can buy and the services it can render for 30 days; N8,000 cannot take care of a family for a week; it is not possible; it is going to be like a drop of water in the ocean. We do not know how the government is going to get clarity for those who will require it the most; how it will identify those who are most affected, and how the palliatives will get to those actually in need. Labour is asking for a pay rise; for those in abject poverty, we believe the government can do better for them”.
This is a generally correct critique but which raises the question of what labour is still doing at the negotiation table? The negotiation has gone on for about three months now while workers continue to suffer. The truth is that whatever palliative that is eventually granted will likely end up like the COVID-19 palliative two years ago – hoarded by politicians and crooks while many poor people got nothing. The only way out is struggle. There is a responsibility on the NLC and TUC to change course. The starting point of this can be the convening of a conference of trade unionists and Socialists to discuss how to build a programme of struggle to save the working people from the ongoing nightmarish situation. At the same time, however, there is the need for activists to begin to organize to build united struggles from below. In this sense, the DSM supports the initiatives been taken by the Joint Action Front (JAF) and other civil society coalitions to organize a fightback. In January 2012 when a mass uprising and general strike took place, it took independent initiatives like this in the preceding weeks and months to prepare the situation.
The question of what to do has now been posed sharply by the surprise July 18 hike in fuel prices. The NLC has issued an angry statement on this hike and on the proposed N8,000 cash palliative. But, despite the angry words and the statement’s ending that the NLC will “take matters in our own hands” there are no concrete proposals for mobilisation or action to defeat this onslaught on living standards.
This is why we hereby call for urgent preparation for mass protest to begin through leafleting and public mass meetings. Democratic action committees made up of activists, workers in the workplaces and youth in the community and campuses should be built from below and linked up across states and nationally to give leadership to the movement. A series of protests and demonstrations can act as a powerful lever of pressure on the leadership of the NLC and TUC to act. Given the suffering and the anger, any initiative for struggle can also quickly develop into a national movement that can force the regime to backtrack. The truth is that the regime remains fundamentally weak. It was “elected” by just 8.7 million voters -10 percent of the total number of registered voters and 37.7 percent of votes cast in the election. This figure is not only the lowest total but also the lowest percentage of cast votes won by any elected President since 1979!
If a mass uprising develops today, the regime can quickly fracture or collapse raising the question of what replaces it. This is why simultaneously as we prepare to fight back, it is also essential for a mass workers’ political alternative political party to be built that can act as a lever for the working class and oppressed masses of Nigeria to take power and begin to run society along Socialist lines. Otherwise, there is a risk of a regime collapse leading to the coming to power of the military or in the worst case scenario, a descent into sectarian conflict something which can take Nigeria further along the direction of barbarism.
- Reversal of pump price of fuel to N195 per litre.
- Arrest and speedy trial of all subsidy thieves and seizure of their ill-gotten wealth
- N200, 000 national minimum wage to be regularly increased in accordance to the rate of inflation
- Immediate crash programme to repair old refineries and build new ones
- Refined fuel from Dangote refinery, when it starts operating, to conform to a price cap of N195 per litre otherwise it should be nationalized under workers control and management.
- Reversal of all hiked school fees. No to student loan. For improved funding of public education
- Immediate meeting of the demands of academic staff, non-academic staff, doctors and all medical personnel.
- Release of all political prisoners and end to attacks on democratic rights.
- Nationalization of the oil and gas sector, banks, big industry and mines under workers control and management
- A workers and poor people’s government armed with Socialist programme.