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Prices and Anger Rise in Nigeria, Presaging More Strikes
Residents of Lagos, Nigeria, shopped in a market on Saturday. Rising prices of food and fuel are breeding discontent.
By ADAM NOSSITER Published: January 15, 2012
LAGOS, Nigeria — After five days of strikes, protests and national paralysis over a sharp rise in the government-controlled price of fuel, Nigerians emerged from their homes this weekend to find the fragile calculus underpinning most people’s lives in the country further threatened.
The price of onions has more than doubled because of the cost of getting them to market. Dried crawfish, hot peppers and watermelon seed are twice as expensive. Lines of cars stretch far down dingy blocks in the gray winter haze, waiting to pay about $3.50 a gallon for gasoline that cost just $1.70 on New Year’s Eve.
The standoff among the Nigerian government, the labor unions and the street continued Sunday, with vows of more strikes and protests on Monday unless the government backs down and brings back cheaper gasoline.
At the grimy Iddo Market in Lagos, a long line of rickety open stalls under a highway overpass, the mood over the weekend was wary. Housewives bustled about the piles of yams and tomatoes for the first time in a week.
“Everything is just double, triple the price,” said Segun Nisi, shaking her head over the cost of watermelon seeds, whose oil is used in cooking here. Similar reactions boded ill for the government’s policy course.
Nigeria produces immense oil wealth, but analysts say that for decades, billions of dollars from the country’s oil earnings have been stolen by a corrupt elite while three-quarters of the country’s citizens live on about a dollar a day. Government-subsidized gasoline has been almost the only benefit from oil production to reach the wider population.
Citing a desire to put public finances on a sounder footing, the government revoked the fuel subsidy on Jan. 1, a step that filled the streets of Nigerian cities with tens of thousands of protesters all last week. The police used live ammunition to disperse protests in Kano and other places; at least three people were killed, and Amnesty International denounced what it said was excessive use of force by the authorities.
Some local commentators saw the protests as the beginning of a “Nigerian Spring.” But they were another headache for a country that is already faced with an insurrection by armed Islamic militants in the north, sectarian tensions in the middle and perpetual restiveness in the oil-producing south. At Iddo, Mrs. Nisi was dressed up for shopping — a shiny white blouse, embroidered black cap — after a week of closed stores and markets. But the experience was not making her sympathetic to the government’s plan. And the seed vendor was not budging from his new price. “We are just suffering here, and the people at the top are enjoying their life,” Mrs. Nisi said. “They are just making people too crazy.”
Even the country’s oil workers are now threatening to strike, which could affect world energy markets if the country’s exports are crimped. One analyst said a strike lasting several weeks could push up oil prices by $10 to $20 a barrel.
At the root of the trouble is a paradox that some see as emblematic of the country’s 50 years of independence: Nigeria is one of the world’s leading crude oil exporters, but it must import nearly all of its gasoline from foreign refineries because years of neglect, mismanagement and corruption have left the country’s own refineries unable to function. The government subsidies, which approached $8 billion, made up the difference between the world market price and the lower price that Nigerians had been paying at the pump, while the middlemen who imported the gasoline made huge profits.
In a 2009 report, the International Monetary Fund called the removal of the fuel subsidy “an important first step.” But in a place where experts estimate that $50 billion to $100 billion in oil revenue has been lost through fraud and that 80 percent of the economic benefit from oil production has flowed to 1 percent of the population, the monetary fund’s approval of a step that hits ordinary people so hard looks provocative.
At Iddo, Mabel Ekewke eyed five small baskets of onions. Before, they would have cost about 1,000 nairas (about $6.25), she said; now the vendor was asking 2,500 nairas ($15.50).
“People don’t have money, and people are very hungry,” Ms. Ekewke said. “The salaries they are paying are just too small. I personally am ready to continue the strike.” That vow was echoed by Nigerian labor leaders, who held talks with the government on Sunday in Abuja, the capital. No agreement had been reached by the evening.
“They’ve come into power and said they would improve infrastructure, and at the end of the day, nobody sees anything,” said Peter Esele, president general of the Trade Union Congress of Nigeria. “People have just lost trust in the Nigerian government. It’s an issue of confidence. We’re not ready to give our trust. It must be earned.”
Even so, for the country’s president, Goodluck Jonathan, any retreat now on the subsidy could be interpreted as a sign of weakness, which would be harmful for a leader dealing with internal unrest on many fronts. The government’s spokesman sought over the weekend to cast Mr. Jonathan’s position in the opposite light. “It’s a sign of strength for a leader to see what’s in the best interest of Nigerians,” said the spokesman, Reuben Abati. “He’s made it clear that it’s absolutely in the best interest of Nigerians to deregulate the downstream sector,” meaning the retail sale of gasoline.
That logic was lost on shoppers at Iddo, though. “If he doesn’t go back, we’ll go on strike again,” Vivian Kezie said as she eyed the onions. She said she was not persuaded by government claims that the $8 billion it is saving by scrapping the subsidy would go to shoring up the country’s rickety infrastructure. “I don’t trust them,” Ms. Kezie said. “They will use it on their families. All their children are in school abroad.”
The strike last week shut down much of the country’s economy; to avoid a repeat, one side will have to budge, and it seems unlikely that it will be the people in the street. “When the equation is still Hobbesian, people are not going to participate,” said Ricardo Soares de Oliveira, a lecturer at Oxford University and an expert on Nigerian oil politics, referring to the grimness of daily life in Nigeria. “People perceive this as a raid on their resources.”
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