I grew up hearing that patience is a virtue, but events over the last 12 months have me seriously wondering whether there is now virtue in delayed decisions. First, it was the delay in announcing ministerial appointments till people formed opinion of the angels being screened for those exalted positions. When the list was finally released, alas, it was an unveiling of the names of the usual suspects. This left people theorizing why the delay was necessary- from theories about the need to purify the Augean stables so the ministers could preside over ‘holy’ institutions, to those about the need to ‘cleanse’ the battered public perception of many of the ministers. For most people, however, it was a huge anti-climax to expectations that promised so much, but delivered little, if any, positive surprises.
Next was the issue of fuel subsidy. This has always been a contentious issue, given that the general populace held the firm belief that it was an inalienable right, and any attempt to deprive them of this was always met with stiff resistance. This scheme then became the greatest fraud in town, with some mind-boggling numbers being thrown around as subsidy payments. About the same time, the then opposition began to sing an interesting tune that nothing like fuel subsidy existed, and that it was all a grand scheme to fleece the nation of its hard-earned revenue. It then wasn’t surprising when stories began to emerge of the grand theft being perpetuated in the name of fuel subsidy. A lot of noise and revelations of the deed were made by the former administration, but ultimately, nothing was achieved in prosecuting those fingered in the theft that was huge enough to bring the nation to her knees.
Given that a lot of irregularities characterized the fuel subsidy process under the last administration, many people held high hopes and expectation that the issue would be resolved immediately the current administration took over the reins of power. It was, however, surprising that even with the dip in oil prices, the country ended up paying almost a trillion Naira for subsidy claims that they had made us believe never existed. At the turn of the year, we awoke to the brilliance called price modulation, which saw the pump price of petrol pegged at N86.50. We were regaled with the story of why this was the solution to our subsidy problems, and how the money saved in the period of low oil prices will be used to offset price increase further down the road.
Fast-forward a few weeks, the realization that price modulation was a mirage finally hit the authorities as fuel scarcity began to bite. In fixing the pump price of petrol by applying an exchange rate that wasn’t available or accessible, it was only a matter of when, and not if supply scarcity would ensue. After weeks of prolonged hardship, failed promises and ridiculous statements, most ludicrous of which was the one that we were so uncompetitive that it was cheaper to continue to import petroleum products, the government finally did the needful, and adjusted the pump price of petrol along with the applicable exchange rate. The process of arriving at this partial deregulation could have been better managed, without the attendant negative ripple effect.
The last bastion of resistance is also about to fall after a series of denials and embarrassing display of utter cluelessness. At the conclusion of the MPC meeting in May, the CBN governor announced that Nigeria was finally about to embrace the flexible exchange rate. He, however, noted that some critical sectors will still be given concession in the rate at which they buy. I was left wondering how this framework of flexible exchange rate would accommodate a discount window for those favoured sectors, and the criteria for such concessions. Are we about to create another two-tier window that will only lead to more confusion?
Try as I may, I fail to find the wisdom in the delay of the above-enumerated decisions. The costs of those delayed decisions are not luxuries that the country can afford at this challenging time. Going forward, my hope is that this government will be bold enough to take critical decisions at the right time.
Olugbenga A. Olufeagba
