From the TUC

Why can’t Paul Collier understand why Nigerians rejected massive cuts in their living standards?

16 Jan 2012, by in International

Paul Collier, one of the most influential development economists in the UK, wrote quite the stupidest article (£) in the Financial Times today. He actually argued that “Nigeria’s youth should have taken to the streets to celebrate” the Government’s unilateral decision to more than double the price of petrol from N65 to N141 a litre overnight on 1 January (from 26p to 57p a litre.)

Apparently, Nigerians were duped into opposing the massive increases which resulted in the consequent doubling of prices right throughout the economy – basic goods, essential services, even medicines. Because in the long run, scrapping the Nigerian government petrol subsidy will create a better economy, releasing money currently creamed off by corruption for investment in basic infrastructure that cannot be prevented in any other way. Bizarrely, the people of Nigeria supported the unions’ call for a general strike. Maybe it’s because so many Nigerians exist on under £1.30 a day. If almost everything has doubled in price overnight, it’s not surprising poor people protest!

Paul Collier wrote that the last week had seen:

“a tidal wave of protest and disruption, forcing the government to negotiate with the unions” (my emphasis)

Unions have resisted attempts by successive Nigerian Governments to unilaterally remove the petrol subsidy, but have always been willing to negotiate the sort of action against corruption, investment in energy infrastructure and promotion of a better economy that would remove the need for the subsidy, so that it can, progressively, be reduced. Indeed, the Nigerian Government was in such negotiations before Christmas, about the gradual reduction of the subsidy. Then they walked away, and dropped the bombshell that sparked the protests.

Betrayed by successive political leaders whose families and friends have enriched themselves in office and done nothing to deal with the frequent demands to take action against the corruption in the oil industry which has left Nigerian infrastructure decaying and power unpredictable (so that almost every business needs a generator using that subsidised fuel), ordinary Nigerians – for some unfathomable reason – want to see some real progress on the challenges that their economy faces before they accept the promises that were all Nigerian President Goodluck Jonathan offered as he ramped up the cost of living by over 100%.

It is deeply insulting to suggest that ordinary Nigerians who manage to live their lives and raise their families are ‘economically illiterate’ as Paul Collier has suggested. I think they know more about practical economics than he does. And the people of Nigeria are better politicians, too, as they showed by forcing their political leaders to make the concessions that led to our brothers and sisters in the Nigerian unions to call off the General Strike just hours after Paul Collier’s forlorn appeal to economic orthodoxy appeared in the FT. You can read more about the successful actions of the NLC and NTUC over at Stronger Unions.

3 Responses to Why can’t Paul Collier understand why Nigerians rejected massive cuts in their living standards?

  1. Jim
    Jan 17th 2012, 8:29 am

    “the consequent doubling of prices right throughout the economy”

    Wow, I didn’t realise everything in Nigeria was made solely of petrol.

  2. Owen Tudor

    Owen Tudor
    Jan 17th 2012, 9:14 am

    Jim – ha ha! But seriously, this is what hiking the oil price does to an economy which is run almost entirely on that oil (petrol for deliveries, fuel for generators to produce the power etc. And, undoubtedly, unscrupulous businesses taking advantage of the excuse to raise prices. But if you’re on $2 a day, as many Nigerians are, it doesn’t take much to push the cost of living up beyond what you can afford to pay. So it’s no use telling people who can’t afford to live today that they’ll be better off at some unspecified time in the future!

  3. Akin Aliu
    Jan 20th 2012, 8:19 pm

    Thank you Owen Tudor for your unbiased contribution to the discourse. I am a Nigerian and I believe anyone who is not a Nigerian who doesnt understand Nigerians and doesnt even reside in Nigeria should pass any unintelligent comment.