On Tuesday, Thisday newspaper carried a disturbing headline. Nigeria’s petrol subsidy bill is skyrocketing this year and by the end of December, the total bill would be $9.8 billion.
This would exceed the total expenditure by all the states of the federation in 2021. This information is in a new report by a member of President Muhammadu Buhari’s Economic Advisory Council and Chief Executive Officer of Financial Derivatives Company Limited (FDC), Mr. Bismarck Rewane. Meanwhile, the Nigerian National Petroleum Company Limited (NNPCL) has come out to confess that its revenue has collapsed due to massive crude oil theft.
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Oil theft and collapse of the Nigerian rentier state
With oil theft and illegal bunkering taking as much as 400,000 barrels per day of the country’s oil production, Rewane said as much as $1.2 billion was lost to the menace every month, which was the combined budget of Osun, Ekiti and Kwara in 2021.
The Rewane report adds that between 2015 to 2020, $5.5 billion was spent on subsidy, in 2021 alone, it went up to $3.8 billion, and $6.2 billion in just the first quarter of 2022. There is no other word for it but madness. Nigeria in its moment of greatest need due to the collapse of revenue inflows is suddenly bloating figures for petrol imports and subsidy. As it has no money to pay, it is borrowing massive amounts of money to pay subsidy for petrol, most of it bogus. Attempts by the National Assembly to establish what exactly is Nigeria’s average daily petrol consumption has been obfuscated by NNPCL, the Ministry of Finance and the Central Bank. The government is behaving like pirates raiding a ship, carrying all the valuables and then sinking the ship as they return to their ship. In our case, however, what is being destroyed is Nigeria and very clearly, those in charge will loot everything, including the future wealth of our grandchildren, which they have already mortgaged and most likely move to Dubai after jumping ship.
Massive theft at the federal level is replicated at the state level. Many state governments continued piling up debts and stealing the borrowed money they are getting in. They do not even bother to pay salaries. State governors today live between Abuja and their foreign primary homes and hardly visit the states they are supposed to be governing. They have chosen their camp and it is not the state they are supposed to be ruling.
The federal government recently put the current daily spending on maintaining the petrol subsidy at N18.4 billion for 2022.
The Director General of the Budget Office of the Federation, Mr. Ben Akabueze, in an interview, suggested that Nigeria might seek relief from the International Monetary Fund (IMF) if it was unable to address its fiscal challenges. The whole world knows about Nigeria’s madness of allowing state sponsored pirates to take over its petroleum production and exports while massively borrowing new money for the same pirates to steal from. Why would any rational institution come into this crazy trap? When the history of this madness is written, the present administration’s economic management team would rise to infamy for continuously asserting we are an under-borrowed country and can continue along the path leaving a deadly legacy to our grandchildren. Maybe it is befitting that the Nigerian state is today reliant on a militant, Mr. Government Ekpemupolo, also known as Tompolo, who got a $1.08 billion to stop the theft. Why not, after all, his name is Government.
Nigeria today has the 25th highest inflation rate in the world, with price rises mainly driven by higher energy and food prices. The naira had lost at least 94.87 per cent of its value in five years, crossing N715/$, before falling to N645/$ recently, and now trading at N703/$. Last week, the Organisation of Petroleum Exporting Countries (OPEC) and its allies slashed Nigeria’s production for the month by 4,000 barrels per day, to 1.826 million bpd, as against the 1.830 million bpd allocated in September. But Nigeria had even before then been unable to meet all of its production allocations, hitting just 1.083 million bpd in the July assessment and falling even lower to 972,000 barrels in August says the Rewane report.
A rentier state is one that is dependent on a narrow single extractive source of revenue such as crude oil. Such states are totally dependent on that source and in normal situations would do everything in their power to protect it. The Nigerian ruling class is so irresponsible that it is unable, maybe unwilling to protect its source of revenue. A few weeks ago, a supertanker with the capacity to carry three million litres of crude was discovered and an alert was sent to arrest it. It allegedly escaped as if it was a small speed boat carrying 100 litres of crude. For a supertanker like that to allegedly escape, it must have the support of the political and security hierarchy in addition to the NNPCL authorities that certify legitimate carriers.
What this means is that within the establishment, there is no one working to serve the interests of Nigeria. For the pirates that are ruling and ruining our country, their commitment to stealing all our resources is the only thing that matters. They are comforted by the knowledge that there is no sheriff in town to question or checkmate their activities. It is very clear where the current dynamics are leading the Nigerian state to – collapse and dismemberment. The onus is on us, 200 million citizens, to elect the government we deserve that can engage the path of salvation and reconstruction. The consequences of state collapse are too serious to accept for the largest population of Black people in the world.
