Biting Fuel Scarcity and Sliding Economy (2)

RingTrue with Yemi Adebowale; 07013940521 (sms only); yemi.adebowale@thisdaylive.com

The embarrassment of fuel scarcity in an oil-exporting country continued for the 5thweek across the country, with petrol selling for as high as N400 per litre in some states. It is so sad to note that Nigeria remains the only member of OPEC that still imports petroleum products. The country suffers whenever there is a slight problem with the supply chain. More often than not, inability to pay subsidy claims to importers creates supply problems. This is the cause of the crisis we have been experiencing in the last five weeks. The response of our Oil Minister (President Muhammadu Buhari) to the crisis was to take off to Iran for a ludicrous meeting of Gas exporting countries. The junior minister for oil, Ibe Kachikwu also joined him on the trip, leaving millions of Nigerians wondering why both men travelled while petrol-instigated hardship is ravaging the nation. Our President returned on Tuesday and took off again to Malta and France for another five days. Buhari has to curb this globetrotting and spend quality time at home, attending to the numerous challenges facing this nation. This is his 14th trip abroad under six months. Buhari is not even thinking about holding a Federal Executive Council Meeting with the “noisemakers” he picked as ministers. Not even one FEC meeting, three weeks after the swearing-in of the ministers. This is unfair to the Nigerian nation.

The persistent fuel crisis and subsidy issue have been with us for years. Unfortunately, Buhari contested election without a blueprint on this and other sectors of the economy. Our dear President came unprepared for the fuel supply challenges. He came unprepared for the challenges of our four refineries and the crumbling price of crude oil. This is why the fuel crisis and subsidy issue have remained with us in the last six months. The crisis may linger for a long time if we are not careful. Buhari needs help with the subsidy and fuel supply issues. It is obvious that he is clueless about these challenges. A man that has spent the last six months blaming his predecessor for all the woes of this nation evidently has no idea of his own.  The legion of sycophants around him can’t help. Genuine patriots must stand up to help Buhari. Patriots must stand up to help the Nigerian nation. This suffering is becoming unbearable.

The response of the National Assembly so far to the fuel crisis has been disgusting. These so-called representatives of the people have clearly failed to speak on behalf of the people. Many of them are too timid to say the truth. They are too timid to tell the President about the suffering in our land. The APC members in the Senate even frustrated attempts to summon our Petroleum Minister (Buhari) to the Senate to address them on the crisis. It was depressing watching Senator Dino Melaye on Tuesday saying “oil marketers are PDP members and the current government is working to change them.” It is a big embarrassment that Melaye is not even aware that the biggest marketer in Nigeria is the NNPC. Through its subsidiary, PPMC, the NNPC is responsible for the importation of over 50% of fuel used in the country. So, NNPC is a PDP member? This clown called Melaye should answer this question. It was so sad watching some of our senators play pranks with a serious national challenge. Major and independent marketers have simply stopped importing petrol because of the huge unpaid N500 billion subsidy claims.

For workers, commuting to their various places of work has become a burden. Cost of transportation has gone up by over 300%.  The responses of the NLC and TUC have been feeble. The NLC President, Comrade Ayuba Wabba came out only this week to lament the untold hardship Nigerians are experiencing with the fuel scarcity in spite of the fact that Nigeria is an oil producing country.
Wabba said further: “NLC is outraged by the continuing fuel scarcity resulting in skyrocketing prices and long queues at filling stations in different parts of the country. It is unfortunate that the situation has not improved after more than 72 hours assurances from government and its regulatory agencies that the situation would improve, and that Nigerians need not go into panic buying.” That was all the NLC had to say. Other than issuing press statements, what has Wabba and the NLC done to ensure that this government does the needful? Nothing. Just showboating. All words, no action.

Where is Tam Davis West? The man who told the nation that petrol would sell for N40 per litre once Buhari took over has suddenly gone into hiding. Is he not aware that petrol is now selling for as high as N400 per litre? What a shame. There is too much deceit in our system.
Meanwhile, the nation’s economic slide continues amidst biting fuel scarcity. Inclement economic environment is threatening industrial production across the country. The economic situation is becoming very precarious with some companies winding up. Access to forex is a big issue. I wrote about the ongoing retrenchment at Airtel last week. The number of people sacked has jumped to over 300. Retrenchment of Nigerians at Virgin Atlantic has also hit about 150. So many companies are downsizing. The online stores are also badly affected.

For most of this week, our Naira fell freely at the parallel market, as scarcity of dollars paralysed activities. It exchanged at N241 to the dollar yesterday. Demand has been persistently outstripping supply. All the steps put in place by the CBN to shore up the Naira are not having the desired effect because they are cosmetic actions. The issue of how to improve supply of forex and appropriate pricing of the Naira must be unemotionally addressed.

This economy is in a mess. We have never had it so bad. Our President must push aside his “type writer” economic advisers and take pragmatic steps to reflate the economy. He has mopped up and locked up huge amount of money from the system through the Treasury Single Account. The money is idle in the treasury of the CBN. This is quality money that should be expeditiously used to reflate the economy by investing in infrastructure and getting contractors back on site. Verified claims of contractors should be paid speedily.

MTN’s N1.04 Trillion Fine: Our Governors and Matters Arising
Many of our governors are clearly greedy and irresponsible. I am scandalised that they are eagerly waiting for MTN Nigeria to pay the N1.04trn fine imposed on it by the Nigerian Communications Commission. Of course, they are waiting for it to be shared at the monthly revenue allocation meeting. This is the impression these squandering governors gave the whole world after the recent National Economic Council meeting in Abuja. Governor Abdulaziz Yari who spoke on behalf of the governors urged the federal government to put pressure on MTNN to swiftly pay the preposterous fine imposed on account of not deactivating unregistered lines. The Zamfara governor was quoted as saying: “The Forum also backs the Nigerian Communications Commission (NCC) over the N1.04 trillion sanction on MTN. The governors agreed that the fine must be paid in full.”

What the hell is the business of the governors with the payment of the fine? By the statement of the governors, we are telling the world that the fine was imposed to shore up the revenue of our Federation Account. I wonder what the governors have done with the trillions of Naira they have shared in the last six months and the additional N720 billion bailout.

I have always supported punitive fines for companies that fail to respect the laws of our land and abide by the ideals of good corporate governance, particularly adherence to best practices in business. MTNN deserves to be punished. However, regulatory agencies must always avoid crippling fines. That was exactly what the NCC did in the case of MTNN. The fine imposed on MTNN is preposterous. What kind of message are we sending to foreign investors? We are talking about massive $5.2 billion fine here. This is disproportionate and must be reviewed.

Many will find the reaction of the Lagos Chamber of Commerce and Industry to this absurd fine instructive. The Chamber stated that activities of regulatory institutions should be in consonance with best regulatory practice as against the current penchant for arbitrary and disproportionate sanctions on erring entities. According to the LCCI, while sanctions are not totally condemnable, such penalties however should not be of such magnitude as to impose a shock from which recovery by entities may either be difficult or impossible.

“The limit of regulatory discretional powers should be clearly defined. The concern is that such powers are commonly prone to abuse and could predispose regulatory agencies to high-handedness and intimidating disposition. This certainly would not augur well for an economy that needs to attract investment. Already, the perception and ranking of Nigeria as an investment destination is unsatisfactory. For instance, Nigeria ranks 169 out of 189 countries profiled in the World Bank Ease of Doing Business Report for 2015. It also has a ranking of 124 out of 140 countries profiled in the global competitiveness report of the World Economic Forum,” added the LCCI.

It noted further that the regulatory environment remained a critical factor in the latest rankings of Nigeria, adding that this period is not auspicious for imposition of intimidating and overbearing regulatory tendencies. It explained that while it did not condone infractions of extant regulations or guidelines, “there should be some restraint in the imposition of penalties by regulatory agencies in the interest of private sector development and the advancement of the nation’s economy.” The LCCI has said it all. I hope our dear president will do the needful.

THISDAY