Sunday, February 24, 2013

govt fuel subsidy; to subsidize or not?

After all the jargons….after all the plenty talk…after all the making of faces:  knotted frowns and pretentious smiles. After all is said and done… the simple fact that remains is that ‘money goes around’, with control by those who have the power.

The last time Nigerians copied that WallStreet delusion by staging OcupyNigeria or whatever in reaction to the Nigerian government’s decision to remove subsidies from fuel as dictated or directed or suggested by the Briton Woods, my reaction was simple: instead of demanding for the stay of subsidy, let the people ask for working transportation, good roads, vehicles (bicycles, motor-cycles, trains, boats, aircrafts, etc). Let the people demand good supply of energy to their business centres and homes, etc. This is be a simple exchange. So govt takes subsidy away and the people get their basic needs. nice bargain.

It's a matter of opportunity cost:
Why would I shift the matter there? It’s simple. Just a cursory moment of thought shows the beating of the word subsidy is just another erection of the nebulous. What a man needs is what it takes to survive and function as he wants or as is expected of him, as the case may be, in his society. So whether the means of providing that need is called subsidy or grand-daddy is irrelevant. See pal, the whole idea of economics needs a rethink in these days as it has become abundantly clear that so far the human society is less served, if not robbed, by all the convoluted talk of theories. They are not working. They have not worked. And I dare say they’d never work.

The resource in the world is finite. That is the basic block that should show that when a man is made into a star as being a millionaire or a billionaire, what it means is that someone has suffered for that one man to accumulate all that for himself. The tragedy for me is when the very robbed person is the one who is so deluded to look on in amazement of the billionaire.

I cringed to the marrow when upon the announcement of Ghana finding oil by my dear Kufused and his lot, the then vice prez the late Alhaji Aliu Mahama stuck his neck out proudly to claim that it meant Ghana was also now going to make millionaires. Such glorification of idiocy hit me to the core! For the religious and the traditionalists stuck in dogma! I’m sorry I don’t observe so called respect for the dead in trade for sanity. So observe your so called respect by claiming you don’t speak evil of the dead when I even know it’s just a farce you put up as and when it suits you. Anyway… so that was Alhaji and his idiocy! the same person who swore oath to ensure the welfare of all Ghana-ians.

So the govt of Ghana says it wants to remove fuel subsidies to pave way for the enjoyment of the poor since as the arrangement is now, according to govt officials, the poor do not benefit. Ayoooo! I say Ayoooo! For me I don’t care whether you keep subsidies or throw them into the deep blue sea. It is neither here nor there. What I care about is, if I set out to take trotro from Osu to La, I should be able to afford it and that means govt must make it possible for me to afford. It is the job of govt. Else govt must cease to exist.

The govt worker who goes to sit at the ministry serving officials needs adequate financial base to afford food, clothing, education, transportation, etc, every single day of his life and for a meaningful estimate of his dependents (spouse, children, etc. China says one child per family else fine). This is what all those economic theories must be solving. Else what’s their use? And to such a man, what does it matter whether you keep subsidy on fuel or not when he still cannot afford in any of the two circumstances because his salary is inhuman to say the least?

Ghana has been down this road of removal of subsidy. That is what the Kufour govt did. They claimed Rawlings govt had so rundown the economy with subsidy that they needed to do full cost recovery. Kufour even had the guts to tell folks to tighten their belts while we all saw him gleefully not only loosening his own but adding more yards to cater for extra regions his waist expanded to with conquest’s jubilation. They said they needed to make the consumer so pay that the cost would be recovered to keep the supply running. So it was done. But in the end the Tema Oil Refinery which was used as a decoy ended up with more debt. That must have been the making of witches and wizards that prevented Kufour and his gang from achieving their pontifical dreams. Alas they had nothing or little to lose. They’d not be countered amongst the poor when the cries are being head.

So I say Ayooooo to current Mahama and his team on their subsidy removal expedition. It’s not impossible to pursue the agenda as claimed by them. Oh no! once you don’t have any witches and wizards disturbing you like they did to Kufour and his gang. So the poor might just benefit more this time. But I say Ayooooo!

What I find funny is how suddenly many current govt appointees started talking about subsidy not being helpful to the poor: Fiifi Kwetey, Fred Tekper, etc. They all sounded too mechanical to my hearing. It was as if they had rehearsed their responses to the subject matter. But again I say Ayooooo! I don't agree that we should all pay the same rates for fuel when we're not all consuming at the same rate and when we're not all earning the same from the same govt purse. It should be a simple matter that those who take more from govt must be made to pay more for what they consume. But we're doing little to address such disparities.

So for now, the usual cycle continues, fuel prices are increased, workers would demand increase in minimum wage and hence increase in salary while strikes hit the headlines with all kinds of nonsensical claims jumbled with the sensible claims.

Let us see what the removal of subsidies would allow to flow from pipeline.

Pal, I say Ayoooooo!

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