Opportunities in a Deregulated Era [opinion]
(AllAfrica Via Acquire Media NewsEdge) I remember vividly the NITEL field workers who were king in my neighbourhood, as they were in other places serviced by NITEL. They were courted by hapless customers who were hostage to the monopoly services of the government-run telecommunications company. Often, there were men and women in business suits walking around with the gang of workers, to fix a perennially malfunctioning line. Their ubiquitous companion was a ladder. If the gang wasn't trekking, they were chauffered around by a well-to-do customer, who desperately wanted his/her line to work.
No dialling tone; cable pair snag; underground cable problem; rain water; overhead cable severed by an articulated truck carrying a container. These were the commonest excuses for the dreary services offered by NITEL. Ten years later, who remembers NITEL and its nuisance? In fact, most persons in their teenage years will be puzzled by the scenario I have sketched above, because they didn't live through it. At its peak, NITEL had about 440,000 lines countrywide. Today, there are about 90 million lines in the country---thanks to deregulation and the advent of GSM. The gains of the easy and plentiful availability of telephones in the country today extend to the ICT sector. The chain effect has been new investment opportunities, and jobs that were beyond contemplation 15 years ago.
What worries me about the negative voices that are dead against the planned deregulation of the downstream sector of the petroleum industry, with the attendant withdrawal of fuel subsidy, is their curious unwillingness to discuss the potential multiplier opportunities that lie ahead. Yet, these negative voices are some of the most strident in railing against the parlous state of the economy, the large army of jobless youths, and limited opportunities that abound. Jobs do not fall from the sky; they are a function of the political economy, which in turn influence investment flows.
In November 2011, the Federal Government released its Subsidy Reinvestment and Empowerment Programme (SURE). That is the government's best articulation of what it intends to do with its savings from the removal of fuel subsidy. It is a detailed document that ought to engage the attention of public affairs commentators and other members of the elite class, to discuss, dissect, and proffer advice, not only to government, but to all as to the inherent opportunities that lie in the planned regime of deregulation. The fact that such focussed debate is not happening right now is one of the enduring tragedies of the Nigerian elite. A good many have come to believe that they must not appear to be anti-people, hence they must be on the popular side, which means to oppose the proposed policy. But, as I have noted, this is a huge disservice, because the elite class has not paid even passing attention to the many benefits that lie ahead. I will take just a few examples.
The SURE idea includes a public works and youth employment scheme, the specific objective being the provision of employment in labour intensive works. Such works will involve environmental projects, for example, flood and erosion control, and tree planting to combat desertification. For years, states in the South East have been groaning under erosion menace. I should expect advocates in that region to wage a relentless campaign to get their states and areas involved in the erosion remedial measures. That, in my view, is the stuff of enlightened debate.
Furthermore, we all know that desert encroachment has been threatening the sahel states over the years. Now the Federal Government proposes to use savings from fuel subsidy removal to plant trees in the region, and some persons are kicking. Why? Should we leave the desert to keep eating up our arable land? Will these same persons not accuse government of abandoning its responsibility? Or, do these negative voices expect the government to go cap-in-hand to the United Nations Environment Programme (UNEP), or other donor countries and agencies? If we can help ourselves, why should we go abegging? Mind you, there are jobs to be created under the scheme envisaged by the Federal Government.
Let us take another example in Lagos. Those living or working in, or merely passing through Apapa know that the suburb has become a nightmare in recent years.
Tankers from all over the country are parked indiscriminately, blocking the expressway, creating serious traffic jams that result in lost manhours. Once or twice, fire incidents have broken out when some of the trucks parked on the bridge went up in flames, endangering the bridges themselves. About 1,500 tankers are said to convey petroleum products on the nation's highways daily. These cause severe damage to the roads, and there are innumerable reports of how these tankers have caused fires on the highway, resulting in the sad loss of lives. What am I getting at?
Fuel tankers have littered our highways because petroleum products pipelines have been heavily vandalized almost everywhere in the country. Under SURE, the Federal Government plans to enhance the integrity of the petroleum pipeline system through additional investment and protective security. This will radically improve the availability of petroleum products nationwide, drastically cut highway maintenance costs, save more lives, and eliminate bridging. But more importantly, the repair works will generate employment. Why are those who are opposed to deregulation not commenting on this?
Let me extend the argument further, and in the process respond to those who have argued that the government ought to encourage increased domestic refining capacity. Under SURE, the Federal Government is not hazy about its intentions. It states unequivocally that three new refineries will be built under a counterpart funding arrangement with the private sector. The refineries and their processing capacities will be in Bayelsa (100,000 barrels per day), Kogi (100,000 barrels per day), and Lagos (200,000 barrels per day). The refineries are scheduled to be completed within three years after the contracts are awarded. When they come on stream, these refineries will contribute nearly 30 million litres of petrol to the domestic market. Add to that the three existing refineries, and the opportunities are manifold. Thousands of employment will be generated in the process. Yet, those who are kicking against deregulation, and the planned removal of fuel subsidy, have not addressed the substance of these proposals by the government, with respect to what it intends to do with the savings from the removal of petrol subsidy.
There are other areas of intervention which the Federal Government has outlined in SURE. Among these are agriculture and ICT. There is no doubt in my mind that if those who are opposed to the subsidy removal took time to study the Federal Government's Subsidy Reinvestment and Empowerment Programme, the nature of the on-going debate will change. We are simply wasting too much time on just opposing the policy without an in-depth analysis of what is on offer. Let us instead focus on what the opportunities are. We cannot grow the economy by blocking avenues that will open up new prospects.
Those who are old enough, and whose memories are still sharp, cannot forget so easily the ordeal of air travel when Nigeria Airways was the only scheduled carrier in the country. Buying your ticket then was one thing, getting a boarding pass was quite another, and then actually taking off was an ordeal. When the monopoly of Nigeria Airways was broken, Okada Air took to the skies in the mid-1980s, and the story has not been the same.
As I have pointed out in this piece, we should rather approach the planned deregulation of the downstream sector of the petroleum industry with a positive disposition. There will be inconveniences in the short term; but going forward, the opportunities are limitless. I believe that the real issue for debate is how to harness the future benefits, and ensure that the citizens have a much better life than we are currently experiencing. We must put an end to opposition of governmental policy without proffering workable alternatives for the growth and development of the country.
Agunbiade, an Economist, lives in Lagos
Copyright Leadership. Distributed by AllAfrica Global Media (allAfrica.com).
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