Economist -- Protests in Nigeria: Let them have fuel

Economist

21 January 2012

Protests in Nigeria

Let them have fuel

The president loses his nerve and brings back a controversial subsidy

FEW countries waste public money more wantonly than Nigeria. Supposedly to help the poor, the government long sold fuel at half the price it pays on international markets. The biggest beneficiaries were local wholesalers who—illegally, but with impunity—sold the subsidised fuel on to neighbouring countries at full price, leaving an $8 billion hole in the treasury every year. All this in Africa’s biggest oil producer, which must import 85% of its fuel because it has no decent refineries.

Abolishing fuel subsidies would seem sensible and worthy of public support. The savings could pay for new roads, hospitals and schools. Smashing the fuel mafia would also help the fight against graft. Thousands of officials are paid off by fuel-sellers. The ringleaders manipulate elections with the proceeds to keep friendly officials in power.

So it was a bold move by President Goodluck Jonathan to stop subsidising fuel on January 1st—perhaps even bolder than he had reckoned. Millions of Nigerians promptly rose up in revolt, even though they had much to gain in the longer term. Ten people died in nationwide protests and hundreds were injured. The army had to be called onto the streets. A general strike paralysed the economy. Oil workers threatened to shut down wells—and the government’s access to cash.