Let us have fuel scarcity
Think of what will happen if Nigeria was to go through another round of fuel scarcity today. First, you will start seeing all sorts of able bodied young men standing by the side of the roads with jerrycans in their hands selling petrol. Most people call them touts but when the last fuel scarcity earlier this year got so bad, a friend of mine said he had started referring to them as ‘fuel and hydrocarbons consultants’ when he realised he could no longer move around without them. When there’s no fuel scarcity, these young men (and women) are not to be seen selling fuel by the side of the road. It is therefore clear that fuel scarcity creates jobs.
Second, we know that the vast majority of crime in Nigeria is committed by young able bodied men with nothing but time on their hands. We can certainly say that there is strong overlap between demography of fuel consultants and those who commit crime. But such young men are not omnipresent. They can only be in one place at a time which means that if they are standing by the side of the road selling fuel, they cannot be somewhere else committing crime. We can also conclude that fuel scarcity reduces crime in society.
Third, petrol station attendants are some of the least paid people in Nigeria. If we are to be honest, it is not a very nice job and no one is really doing it because they have a passion for squeezing nozzles. Furthermore, no one really likes or trusts them – motorists assume attendants are out to cheat them by pumping air into their tank or trying to avoid giving them their change. But when there is fuel scarcity, the lowly petrol station attendant is exalted. They make a lot of extra money and they suddenly command the respect of motorists and have dignity. Indeed, when there is fuel scarcity, being a petrol station attendant becomes one of the most sought after jobs. From this we can conclude that petrol scarcity boosts the income of the poorest in our society and gives them respect and dignity.
So what are waiting for? Here we have an opportunity to create jobs, reduce crime and boost the income of the poor. The President should not waste time in sending a Fuel Scarcity Bill to the National Assembly. By making petrol scarce, the government can fulfil one of its biggest campaign promises – creation of jobs.
If you think this is a ridiculous idea, I invite you to tell me how it is different from Nigeria’s current policy on cement and various other things that have been banned or protected ostensibly to boost local production. By making anything scarce, you can create jobs. If water becomes scarce, it will create jobs for able bodied men who can push water carts around. If you make forex scarce, you will create plenty of jobs for people who sell forex in the blackmarket. And so on.
Yet, making things scarce to create jobs and wealth sounds ridiculous as an idea precisely because it is. Scarcity raises the price of those things – no economics degree is required to figure this out. No one wants that. Motorists are forced to pay far more for their fuel than in normal times. Transport costs go up and the reduced productivity drags down the economy.
Everyday in the papers, there is one government minister or the other telling us that Nigeria ‘loses’ one large amount of money every year importing something that can be produced locally. When you hear this, you know a ban is coming. The idea that you can ‘lose’ your money by exchanging it for a product or service you want is one of the rare and special laws of economics the Nigerian government espouses. That it may not be a good idea to make Nigerians poorer by making products scarce with a ban on imports is not something that concerns policymakers at all.
There are times when it makes sense to protect a local industry to give it time to grow. But this is only half of the story. The other equally important half is that it is industries that should be protected and not companies. That is to say, robust internal competition must be ensured if an industry is protected from outsiders. Without this, all that will be done by banning things is to create scarcity and transfer of wealth from Nigerians to the favoured company. A recent World Bank report titled ‘Breaking Down Barriers: Unlocking Africa’s Potential through Vigorous Competition Policy’ showed how Nigerians (and Africans) are forced to pay three times the world price of cement because of the scarcity created by governments. Africans are overpaying by $2.5bn every year for a product that was invented by the Romans before Jesus Christ was born.
The idea that you can ban and protect your way to economic glory is now the equivalent of scripture that is never challenged in government circles. But which country charted a path to economic development in this way without ensuring internal markets and competition? If you find such a country, do let us know.
This country of 180 million energetic souls has an economic engine that is yet to be switched on. To unlock the animal spirits and idle oomph in the economy requires clear headed thinking. How can the latent energy of the Nigerian people be harnessed to get the country going?There are many ways this might not be done. But a government that thinks it knows best and sets out a narrow vision for the country (from which deviation is not permitted) is unlikely to be the one to do the unlocking.
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12 Comments
Whaoooo. Lovely
I could not continue reading your write up as no sense can be made out of it, I want to take you up on Water and FOREX instances you have given but only if you can define scarcity.
Try please.. it’s not that hard to understand.
The definition of “scarcity” is on the first page of ANY secondary school economics textbook. If you missed the class many years ago, Google now!!
Feyi Fawehinmi has always been a good Writer. No Argument. His Ideas are always on Point and I seem to agree with him His Main Idea: That the Market is always Right! That the role of Government should be to liberalize the ‘market space’ and create a level playing field. Right? Anything else is #CabalAlert.
Well, now I see everything as an intertwine of fabrics…like Ankara sewed into Cotton and Silk material. Nothing is ever so simplified and yet he reduces His ideas to ‘only’ fuel scarcity…I was Blind…Now, I can see!
At present, I am reading a Book “From Third World to First World” by Lee Kwan Yew and it dawned on me these are theoretical ‘wannabe Economist’ …that knows next to nothing about Nation Building…They are at best #ArmChairCritics. Like a Man with a Hammer and sees all Things as Nails, that should be drilled in by only one way. Feyi sees the market mechanism as “Ultimate Savior” and the only way to Nation Build.
Saudi Arabia = $700 Billion External Reserve
Nigeria = $30 Billion Reserve
Import Bill = $4 Billion Monthly
No Infrastructure. No Savings.
Read His Illustration about Fuel Scarcity…and you understand How simplified he makes all things appear! We have an FX problem…
2019…Feyi for President!
I am confused – what is your point?
As an aside, I encourage you to avoid ad hominem attacks and address the issue. Such attacks diminish and confuse your argument.
Simple Argument!
You cannot take out a ‘Single Variable to explain a “Basket of Variables” like he has just done here.
Fuel Scarcity cannot be discussed in singularity! Let Him Analyse the issue taking into account the causation of the problem of Fuel Scacity (FX Scacity, Low Oil Prices and Drop in Production due to the ND Avengers) and how everything fits into creating Jobs.
All Things NOT been equal.
Do you understand now?
Good of you to write.
#penance ?
You will fail to teach an old dog new tricks so try a different approach?
No one disputes his ability to write, that is not any important here. I just thought we could have some sort of insightful discussion but, I can see the likes of #Ogom are already drifting. I have never been a student of “Google” if I must tell you. In Macro-Economics there is no right or wrong answer, what matters, is how you justify your argument. You might need to retool your thinking only if you know what I mean #Ogom but in any case, an average Nigerian is expected to respond the same way you did.
Lol talk about legalising corruption. Call me crazy but if we can actually organise our country’s woes they just might work in our favour. Good one Mr Feyi.
Good read. Corruption is endemic and the way of life in Nigeria. Imagine what would happen if transparency, integrity and accountability was the way of life in Nigeria. We wouldn’t be here writing and commenting, rather we would be praising our leaders for keeping to their words and promises!
Mr Feyi, your number one failing is that you fail to take TRIBALISM into account when discussing the political economy of Nigeria. You like to PRETEND it doesn’t exist and it’s very likely some kind of Freudian reaction to your own parochial mentality.
That’s why you campaigned for Buhari the Dullard. He is the very antithesis of a free marketer. I warned you of it but your reaction was that he can be taught, he will fight corruption bla bla bla.
Well how will he learn when it means his people will have to give up easy access to unearned income?
Listen. The reason Nigerians PREFER government dominated and regulated markets is because it enables them to AQUIRE some share of Niger Delta petro-revenue without working for it. Essentially Nigeria is built on THEFT of resources. Whichever tribe controls the FG gets to steal the most. That most of the money ends up in the hands of a few doesn’t matter a long as the beneficiary is from your tribe. That is how 99.99999% of Nigerians think.
The ONLY solution to Nigeria is EXTREME TRIBAL AUTONOMY with a weak central government. Stop the nonsense. Faith in a united Nigeria is as specious as belief in the Virgin birth or the ascension of Prophet Mohammed on a steed. The real apology you owe Nigerians is about your own HYPOCRISY. You’re essentially YORUBA first and not Nigerian. Embrace it and stop all this feint and dodge
I still cringe at the thought that this Feyi guy contributed monetarily to Buhari’s election. Reminds me of Fashola. Such a brilliant mind must have seen Buhari’s murderous intentions in the east and South South. There is a poison that being together as a unitary nation produces in us all, not just the Yoruba. Such a good liberal economist that doesn’t ever mention individual or community property rights. How much does oil and gas really cost that the Southwest must have it taken from Niger Delta? The eventual separation of our peoples will do us all much good.
We will review and take appropriate action.