Nigeria: Government plans the selling off of oil industry

Labour must say: No to deregulation and privatization!

At the end of February, Nigerian president Yar’Adua’s government announced the total deregulation of fuel prices and the privatisation of the country’s oil refineries. This led to immediate protests and calls from the two trade union centres, the mainly industrial NLC and mainly administrative/supervisory TUC, for the rescinding of his decision. The leaderships of both the NLC and TUC were scheduled to meet on 11 March and the Democratic Socialist Movement (DSM, CWI in Nigeria) issued the statement below on 10 March. The trade union leaders met a day early, but while giving the government a 21 day ultimatum, decided only to call rallies for unspecified dates, rather than more concrete action. Although the trade unions also called on the government to implement their recent demand for a N52,000 ($350) minimum monthly wage, their statements implied possible support for deregulation.

Published below is a DSM statement issued on March 10.

Government plans the selling off of oil industry

For over two decades now, a combination of international capitalist forces (particularly oil corporations and cartels) and their Nigerian pro-imperialist, capitalist backers have been waging a protracted and sometimes ferocious war with the labour movement. They wish to put oil, the mainstay of the Nigeria’s economy, under the complete control of the profit merchants, in the name of deregulation and privatisation. Despite the all too often incoherence and timidity of most labour leaders, the mass of working people – those who suffer the brutal effect of every neo-liberal, anti-poor economic policy – had, through numerous mass actions including strikes and public demonstrations, prevented total success for the capitalist ruling class in this struggle.

Now the ongoing global capitalist economic crisis has presented imperialism and the local ruling class a perfect excuse to implement its age-old “profit first” agenda in the oil sector. Between last July (when a barrel of oil was selling at $147) and now, Nigeria has suffered around a 73% decline in its income generation, as a result of the international capitalist crisis. Thus, Yar’Adua’s capitalist government is pretending that this ferocious attack on the working masses is intended to reposition the economy against the ravages of the global economic crisis. In reality, it is a policy and strategy of making the ordinary masses, who did not significantly benefit from the past capitalist boom, now bear the brunt of its bust!

For years, the government had to use some of its oil revenues to finance the importation of refined fuel, something made necessary by the ruling class’ utter failure to ensure that the country’s oil refineries functioned. Now, faced with declining oil revenues, the ruling class want to cut as much government expenditure as possible, so they can continue to loot – hence the removal of the so-called oil “subsidy”. The government announced, on 26 February 2009, its intent to implement “full deregulation” of the “downstream sector”, as well as “privatisation” of the nation’s refineries.

Government spokespeople have sought to justify this pro-capitalist measure on the basis that government subsidies and hikes in petroleum prices have only benefited fraudulent government officials. They have equally argued that deregulating the oil sector and privatisation of the oil refineries is situation where ordinary users of energy would not have to subsidise fraud and inefficiency, and at the same time would ensure that fuel products are constantly made available to consumers at fair and affordable prices.

Amongst those lending credence to this false and simplistic bourgeois illusion is Adams Oshiomhole, past president of the NLC (Nigeria Labour Congress) and current governor of Edo State, who in fact is a member of the deregulation steering committee, appointed by Yar’ Adua and chaired by Bauchi State Governor, Yuguda. Arguing from the correct premise that importation of fuel products, as well as huge amounts being paid as demurrage on landed vessels, unnecessarily add to the costs which consumers have to pay for fuel, Oshiomhole called for deregulation and privatisation of the oil sector. He said, “Demurrage is a problem and the country spends so much importing petrol. The refineries should be privatised. They should be sold off. I don’t care who buys them and how much they pay. Even if it is one naira, let it be sold. The issue is that products must be available” (This Day, February 11, 2009).

Socialists and working class elements must not for a second accept these false arguments. In the not too distant past, capitalist spokespeople used to justify incessant hikes in fuel prices on the excuse of meeting the real cost of these products. On the other hand, labour and the mass of the working people had always insisted that government claims of subsidies were false. Now propelled by their desire to totally hand over the oil sector to profit merchants in the name of deregulation, the government has now come round to indirectly concede to labour’s position in this regard, by stating that its so-called subsidies had only been going into the pockets of oil racketeers and profiteers, within and outside government. But like true anti-poor, capitalist politicians, this belated truth has merely been used as an excuse to foist on the working people the mother of all social and economic robbery, a.k.a deregulation and privatisation. Instead of taking firm and concrete measures against all those who looted public money in the name of ‘subsidy’, as well as those who collected tens of millions of dollars to repair the nation’s refineries without actually doing so, the government has now come up with the disingenuous solution of selling the entire oil sector to these same looters and their capitalist collaborators.

Labour’s response

There has been an avalanche of verbal and intellectual opposition from the trade union leaders against government decisions in this regard. In fact, the national executives of PENGASSAN and NUPENG, the two main industrial unions in the oil sector, have jointly issued a 21-day ultimatum demanding the withdrawal of these anti-poor policies. For its part, the Nigeria Labour Congress has summoned an emergency meeting of its NEC for March 11, for the first time since Yar Adua’s reign begun to further deliberate on labour’s response and actions against these hated policies.

On a positive note, the various statements credited to top labour leaders across industrial and organisational divides, have shown a good understanding of the fact that the latest deregulation and privatisation policies are not just individual policies but rather underpin the entire socio-economic strategy of the ruling government. Unfortunately however, while the labour leaders had been quite vociferous and emphatic over their rejection of the “full deregulation” and privatisation of the refineries, they have, at the same time, revealed a lack of a convincing and practical alternative to these anti-poor policies. This is a thread that runs through all the statements and pronouncements of key labour leaders over this, an attack on the working masses and the economy.

Abdulwahed Omar, the NLC President, has, among other things, made the following statement as reported in the 2 March edition of Daily Independent: “The economic meltdown has now shown that the economy and its regulation cannot be left to the whims and caprices of free market forces and that government does have a strong and leading role to play not only in the regulation of business and the economy but that it must also be a key player in the ownership and management of business and non-business institutions for the regulatory role to make an impact. We maintain our long-held position that privatisation has adverse effects on employment, prices and public welfare and that there should be no privatisation of the strategic economic social sector and public assets. But in a situation where privatisation is inevitable, the process must be transparent, participatory and accountable, with emphasis on the need to protect jobs and benefit Nigerian workers in the affected enterprises. It is in this light that we kindly request that Mr. President revisits the entire privatisation programme, with a view to instilling sanity and transparency in the process”.

His counterpart in the Trade Union Congress, Peter Esele, at the same occasion where Umar made the above quoted statement, stated, “The Federal Government should, as a matter of utmost urgency, fund from the national treasury, the process of re-opening all closed down factories, in order to reverse the present trend towards de-industrialisation…as this has continued to harm employment generation as well as generate lower economic growth. The ongoing nation’s economic crisis is a pointer that only a new system of government that pushes forward the decent work agenda is needed that would put an end to massive inequality which has characterised the nation’s economy. We reject the continuation of the neo-liberal economic policies, which has resulted in massive closure of factories, particularly in the textile and the footwear and rubber industries, reduced power generation, collapse of public infrastructure. Government partnership is critical to ensuring the effective implementation and sustainability of the 7-point agenda, industrial revolution through power and energy agriculture and food security, wealth creation and employment, mass transportation, land reforms, security qualitative and functional education and of course, Niger Delta development”.

Babatunde Ogun and Peter Akpatasan, Presidents of PENGANSSAN and NUPENG respectively, the two industrial unions operating in the oil sector, have equally expressed their opposition against the latest policy of “full deregulation” and “privatisation” of the oil sector. According to Ogun: “The government has betrayed the trust of Nigerians. Before you can deregulate, certain conditions must be fulfilled. When other nations are injecting money into their economies, the Nigerian government is withdrawing money. The refineries are not working and government is deregulating to inflict more hardship on the people. It is not acceptable and we must resist it. By deregulating at this time of the global economic crisis, the government is calling on Nigerian to revolt”. Peter Akpatasan has stated that, “Deregulation cannot work. Deregulation requires that certain parameters must be in place. You cannot deregulate in a market dominated by a cartel. This cartel is so strong that it can continue to manipulate prices; out of the reach of common man. You cannot deregulate when you have no refineries. There will be serious economic crisis”.

A socialist alternative to deregulation and privatisation

To be able to halt and ultimately defeat the anti-poor, pro-capitalist policy of deregulation and privatisation, would undoubtedly require massive and sustained mass action by the working people themselves. However, labour would be unable to sufficiently guarantee this kind of mass mobilisation and struggles unless its programme and strategies are entirely based on a democratic socialist agenda. The demand that government should play “a strong and leading role… in business and economy … be a key player in the ownership and management of business and non-business institutions”, on the surface, sounds very radical. Equally desirable is the TUC President’s demand that, “The Federal Government should, as a matter of utmost urgency fund from the national treasury, the process of re-opening all closed down factories in order to reverse the present trend towards de-industrialisation…as this has continued to harm employment generation as well as generate lower economic growth”. However, only those suffering from a stupendous political naivety and or treacherous bankruptcy would expect the Yar’Adua capitalist government to implement these kind of demands. In a world dominated by a capitalist neo-liberal economic agenda, and especially in a country whose ruling capitalist elites have, time and time again, shown a limitless capacity to implement anti-poor policies in order to preserve profits and privileges, only an outright socialist, mass struggle which puts in place a government of the working people, represents a viable way to achieve this kind of demand.

On the one hand, there is the admission that “privatisation has adverse effect on employment, prices and public welfare and that there should be no privatisation of the strategic economic social sector and public monuments”. On the other hand, and without cogent and principled reasons, labour leaders at the same time say: “where privatisation is inevitable, the process must be transparent, participatory and accountable, with emphasis on the need to protect jobs and benefit Nigerian workers in the affected enterprises. It is in this light that we kindly request Mr. President to revisit the entire privatisation programme with a view to instilling sanity and transparency in the process”. Bluntly put, this is nothing but double speak i.e. speaking from the two sides of the mouth at the same time. On the one hand, labour leaders argue against privatisation because it can only bring harmful effect on the masses living standard. But for an inexplicable reason, the same labour leaders are, at the same time, prepared to accept “privatisation” if it is “inevitable” and only insist that “the process must be transparent, participatory and accountable”.

The truth however must be told; that privatisation, especially when it involves the handing over of the commanding heights of a nation’s economy to a few capitalist individuals and corporations at the expense of the crying needs of the overwhelming majority, is an unfair process that can never be implemented in a truly transparent and accountable manner. Labour should instead fight for the nationalisation under workers’ control and management of the commanding heights of the nation’s economy including the critical oil sector. This is the only scientific way to avoid “privatisation” becoming “inevitable”.

There are sections of labour leaders who also wrongfully argue that deregulation can be beneficial to the working class people under certain conditions. For instance, PENGANSSAN President, Babatunde Ogun had argued thus on the current debate: “Before you can deregulate, certain conditions must be fulfilled…The refineries are not working”. His counterpart in NUPENG, Peter Akpatasan had similarly argued: “Deregulation requires that certain parameters must be in place…You cannot deregulate when you have no refineries”. First and foremost, it should be correctly understood that the refineries are not working and will never satisfactorily function because the current state of affairs brings super profits to the self-serving members of the capitalist class, internationally and nationally. Thus, instead of making a futile demand that the neo-colonial ruling capitalist elites implement measures that would make the economy to serve the real interest of the masses, labour leaders must instead lead the masses to fight for the institution of a truly pro-working people and poor government.

In this regard, the building and formation of a genuinely independent working class political party to achieve this end constitutes the primary responsibility of labour. Under capitalist dispensation, calling on government to pump money into the key sectors of the economy on its own would not bring any tangible benefit to the ordinary masses. Yes, labour is right to oppose government using public funds to bail out private enterprises. At the same time, spending public fund to prop up key sectors of the economy under capitalist control and management is the surest guarantee of preserving the prevailing official corruption and dead end.

Equally false is the argument that deregulation and privatisation would reduce prices and guarantee product availability. Currently, fuel prices are unnecessarily high, due to the profit margin being added by oil importers and sundry taxes. Tomorrow, these prices will remain high and can even become higher because there is no constant and cheap electricity, no sufficient underground pipes to transport products, a high cost of transportation on permanently bad roads, etc. Capitalist ideologues will cite the primitive and or absence of key infrastructures as reasons why the masses would have to pay unreasonably high prices for fuel, whether locally refined or imported. The moral is that under either capitalist regulation or deregulation, the profit consideration of the capitalist class could never guarantee oil products at cheap prices for industrial and domestic use.

Therefore, to guarantee sufficient and functional local refineries, which can produce fuel at affordable prices for industrial and private use, the working class, first and foremost, needs to fight for a working peoples’ government that is prepared to put the commanding heights of the Nigeria’s economy, including oil, under public ownership and working class control and management. It is only this kind of government that can be prepared and able to take fundamental decisions that would benefit the majority unlike the present order that only favours a rich few.

The way forward

On a good note, both the NLC and TUC originally pledged to fight the proposed ferocious attack on the living standard of the working masses. The NLC said it would “do everything in its power to save the nation from the catastrophic consequences of this ill-advised policy”. On its part, the TUC promised to use “all means possible to resist full deregulation”.

However, a critical evaluation of labour leaders’ commitment and decisions in this respect does not lend support to an unqualified optimism that there will actually be a fight or how effective such fight would be. To start with, the NLC’s call for an “urgent stakeholders’ forum” to deal with this crisis is based on a fundamentally false assumption that a mutually beneficial agreement can be reached between all classes, the rich and poor, on this issue as well as other key issues bordering on the well-being of the masses. Similarly flawed is the commitment to “resist full deregulation”, because this gives the impression that labour would accept part deregulation. Very significantly, the NLC had “kindly requested Mr. President to revisit the entire privatisation programme with a view to instilling sanity and transparency in the process”. Taken together, all these sentiments represent a desire to avoid class confrontation. Nevertheless, the truth must be squarely faced; that only determined mass action by the masses themselves can temporarily and in the long run defeat the government’s anti-poor policies and win concessions.

Therefore, labour must put in place a programme of sustained mass action and mobilization of the ordinary working masses. Labour leaders must show readiness to engage in serious struggles and not just make a token show, as mostly done in the recent general strikes. A determined fight must be waged to defend and improve living standards. In recent days official statistics have confirmed again what we all know, that for the mass of Nigerians, life is, at best, a bitter struggle. At the end of February, the United Nations’ Habitat organisation reported that while in 1996 the poverty rate in Nigeria was 46%, it had now sky-rocketed to 76%. At virtually the same time, the Federal Government’s own Bureau of Statistics reported that 40 million Nigerians are unemployed – a 65% unemployment rate. These woeful figures do not take account of the miseries that the world capitalist crisis can inflict. They were compiled while the oil prices were at record highs!

This is why it is a matter of life or death for millions of Nigerians that labour wages a serious struggle against a worsening of living standards, the loss of jobs and a better life for all. But for maximum lasting success to be achieved in this regard, labour’s demands and strategies must be based on an idea of changing society by replacing the prevailing unjust capitalist system with a people-oriented democratic socialist order. Merely presenting the impending battle as being solely against Yar’Adua’s government could prevent an effective struggle being begun and if an actual struggle started the masses would only, in the long run, be led into a blind alley if no socialist alternative was offered. Unfortunately, this is what the labour leaders did in the series of general strikes against fuel price hikes under Obasanjo’s government. During Obasanjo’s rule there were six widely supported general strikes, three other general strike calls cancelled at the last minute and the September 2005 mass NLC rallies around the country, but the labour leaders always drew back from challenging Obasanjo’s position and the capitalist system he defended.

Consequently, the DSM (CWI in Nigeria) urges the NLC and TUC to give a specific ultimatum to the government to withdraw these anti-working class measures. Simultaneously, we urge the entire labour leadership to commence with the immediate mobilisation of rank and file workers through mass rallies and peaceful demonstrations, with a view to preparing the labour organisations for inevitable industrial and political mass actions on these issues. Sadly, so far, nothing concrete has been done to achieve the NLC’s recent demand for a new N52,000 ($350) minimum wage. We therefore urge the NLC and TUC to combine the struggle against deregulation and privatisation of the refineries with the struggle to achieve the new minimum wage. We equally call on Adams Oshiomhole, the Edo State governor, who had for several years led mass actions against features of deregulation and privatisation, to immediately resign his membership of the Yar’Adua’s Presidential Steering Committee on Global Crisis.

Instead of working with Yar’Adua we urge Adams and the entire trade union leadership to help build a viable mass movement of the working people to resist this latest ruling class onslaught. We specifically urge Adams to quit the capitalist AC and help build a truly fighting Labour Party with a view to put in place a government of the workers and the poor with the ultimate aim of ending deregulation, privatisation and the entire exploitative capitalist order. The DSM equally calls on the rank and file working class people and youth to begin to put in place plans for struggles and resistance against the latest onslaught from the capitalist ruling elite. We advocate actions to be based on struggles/resistance committees of actions within and among the unions as well as in the working class communities.

Simultaneously, we call on the leadership of the Labour Party together with the leaders of all genuinely pro-masses organisations to fully rise up to collaborate with organised labour to prosecute the impending struggles. Our fighting slogans must be for total and unconditional opposition to deregulation and privatisation. The government’s capitalist agenda is to make the poor masses and workers that did not benefit from the boom to pay for offsetting economic slump with increased taxes and neo-liberal attacks that will make them pay more for education, healthcare, self-power generation, as well as goods and services. Labour must be prepared to mobilise workers, youth and poor in the struggle against all neo-liberal attacks and specifically fight that public resources be really committed to socially beneficial programmes of housing schemes, quality healthcare and education for all, stable and affordable water and electricity services, etc.

With a determination to implement such a programme, Labour could mobilise the mass of Nigerians in action to break with capitalism and begin to live a proper and decent life. But a campaign on these lines could have a wider echo. Throughout the world, not just in Africa, the rapidly worsening international economic crisis is now causing millions upon millions of working people to lose their jobs and homes, or simply fear the future. A determined struggle in Nigeria could show the world that there is an alternative to the chaos of capitalism and help inspire a movement to break capitalism’s grip over the world and begin to build a socialist world where resources are used in the interests of human need and not the private profit of the ruling classes.

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