US where I have lived for two decades still subsidises petrol; what Tinubu government should eliminate is corruption – Farooq Kperogi

SAHARA REPORTERS

United States-based Nigerian professor and social commentator, Farooq Kperogi, has questioned the rationale behind the decision of the President Bola Tinubu-led government to remove the fuel subsidy which benefits millions of Nigerians.

Kperogi in his latest article on Saturday titled, “President Tinubu and dangers of subsidy removal” noted that in the United States, “the belly of the capitalist beast” where he had stayed for two decades, the “governments at both federal and state levels heavily subsidise petrol consumption—in addition to agriculture.”

The US Nigerian scholar noted that it was wrong for the Nigerian political elites to present subsidies as elements of corruption.
He wrote, “Resuscitating existing refineries and creating conditions for robust private sector investment in building new ones are obvious, well-worn solutions to the existing order, which have been floating around for years. Any serious government would make this happen.

“No responsible government shies away from subsidizing the production and consumption of essential commodities for its people. I have lived in the United States, the belly of the capitalist beast, for nearly two decades, and I can tell you that governments at both federal and state levels heavily subsidize petrol consumption—in addition to agriculture.

“When gas prices increased dramatically a few months ago here, both Joe Biden and state governors granted tax holidays to oil companies so they could lower the cost of petrol. Biden tweeted daily about the reduction in gas prices that his policies enabled. Americans call high petrol prices ‘pain at the pump’ for a reason.

“The surest way for a government to lose legitimacy here is to allow petrol prices to go up without doing anything about it. That’s why America’s 50 states collectively spend $10 billion a year to subsidize petrol consumption.

“I know Tinubu, Atiku Abubakar, and Peter Obi said they would ‘remove fuel subsidy’—a code for they’ll increase petrol prices— if they’re elected president, but I can assure Tinubu that if petrol price hikes deepen people’s misery, he’ll have a tough time governing.”

“America and Nigeria share one thing in common: they both lack a well-developed, subsidized public transportation system. America’s lack of a public transportation system is informed by the rugged individualism of its culture (in my university, for instance, 99 percent of students have their own cars even though the university has an intra-campus shuttle system), the territorial vastness of the country, and the relentless lobbying of airlines and car manufacturers.

Nigeria’s lack of a public transport system, on the other hand, isn’t a choice. It’s a consequence of deliberate neglect by successive governments who don’t give a thought to the comfort and well-being of the poor in society.

“Nevertheless, the effect of high petrol prices is similar in both countries: it ignites inflationary conflagrations, wrecks the economy, deepens misery, and inflicts several negative domino effects.
“That is why, in America, politicians are often acutely sensitive to fuel price hikes and go out of their way to keep prices low—even at the expense of other priorities. A January 3, 2012, TIME magazine report noted, for example, that American “politicians’ refusal to increase gas taxes in line with inflation and construction costs starves needed infrastructure of funding.”

“Of course, subsidies are the soul of poor, struggling people, not just in Nigeria but all over the world. Every government in the world, especially in the West, subsidizes basic goods, including petrol and agricultural products.

“One of the sneaky ways Nigerian political elites hoodwink people into thinking that subsidies are bad for them is to associate subsidies with corruption. But that’s a false association. There is nothing in subsidies in and of themselves that makes them corrupt. Corruption is incidental to subsidies and can be eliminated if there’s a will to do so.

“Jettisoning subsidies because it is riddled with corruption is similar to the proverbial throwing the baby out with the bathwater. Any government that can’t eliminate corruption and ensure that people who need subsidies get them has no reason to exist. But, apparently, many Nigerians think otherwise. So, let’s see how, to quote J.M Keynes, “the nastiest motives of the nastiest men somehow or other work for the best results in the best of all possible worlds.”

THIS STORY FIRST APPEARED IN SAHARA REPORTERS

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