Nigerians Protest Removal of Fuel Subsidy, 2012

On 1 January 2012, Nigerian President Goodluck Jonathan abruptly removed
the fuel subsidy provided to citizens by the government.  Finance
Minister Ngozi Okonjo-Iweala championed the decision and the country’s
citizens received no prior warning.  The government argued that the
removal of the heavy subsidy would free up funds for other public
services, including health and infrastructure projects, and that the
liberalization of the fuel industry would benefit the economy.  They
also argued that the primary beneficiaries of the subsidy were the
wealthy, who used more fuel than the poor, and wholesalers who made a
profit selling subsidized fuel out of the country.

Most ordinary Nigerians favored the subsidy, however.  The subsidy was
one of the few benefits they received from a government widely viewed as
corrupt and inefficient.  Even though Nigeria had enormous fuel
reserves and exported large amounts, it had few refineries and thus
imported 70% of its refined oil. Many citizens considered the government
corrupt and did not trust their leaders to spend the funds on other
public services that the government claimed would replace the fuel
subsidy expenditures.  Many Nigerians also pointed to the dramatic rise
of the cost of the fuel subsidy for the government under the previous
Jonathan administration prior to its removal, without improved benefits
to the population, as reason to believe that the fuel subsidy funds
would not be properly reinvested.  They felt that the increase in the
cost of the fuel subsidy resulted from increased funds for corrupt
government officials, and that the money the government gained by
removing the fuel subsidy would also end up with corrupt officials.

The quick rise in consumer prices caused by the removal of the subsidy
furthered the unpopularity of the decision.  Fuel prices rose from 65
Naira per liter to 141 Naira per liter.  Bus fares doubled, and as most
goods moved by road, food prices also rose to as much as two times their
original cost.   

Demonstrations against the removal of the fuel subsidy began on 2
January in Lagos, Abuja, and Kano.   Protesters gathered in central
areas of the cities to demand that the government reinstate the
subsidy.  By 6 January, protests had taken place in every major Nigerian
city, with nearly all economic activity stopped in Lagos, Ibadan, and
Kano.  Protesters demonstrated in central areas of the cities, and they
focused on their support for the fuel subsidy and anger with government
corruption.  Although protesters consisted somewhat disproportionately
of the poor, they came from a wide range of backgrounds.  Protests were
especially well-attended in the northern city of Kano.  Even though the
majority of Nigerian oil reserves were in the North, the primarily
Muslim part of the country was significantly poorer than the South, and
it felt particularly aggrieved by the removal of the fuel subsidy. 
Although Kano typically saw conflict between its Christians and Muslims,
during the protests groups from both traditions provided protection
from police and other potential sources of violence while the other
prayed.  On 5 January, police beat protesters to disperse them from the
central Tahir Square and injured 44 people.  In Lagos, some police
joined the protesters.

While some strikes had already begun, the two largest unions in the
country, the Nigerian Trades Union Congress and the National Labor
Congress called for a national strike beginning 9 January. The Nigerian
Medical Association and the Nigeria Bar Association offered their
support to the strike, as did a number of other unions.  Many of the
protesters began referring to their campaign as “Occupy Nigeria.”

On 9 January, the general strike began, with oil and gas workers joining
the strike.  A total of 11 protesters had been killed by security
forces by this point.  Notable Nigerian figures, including Chimamanda
Adichie and Chinua Achebe, voiced their support for the protests. 
President Jonathan began to try to limit the damage in the face of
growing pressure.  He announced a panel to oversee the funds freed up by
the removal of the fuel subsidy.  In another move aimed at responding
to allegations of corruption, he announced a 25% reduction in all
government salaries.  He also told the country that there would be an
increased number of buses so as to reduce transportation costs.  He did
not, however, reinstate the subsidy or cede to a popular demand of the
protesters that he fire his Finance Minister.  Jonathan maintained the
support of the majority of state governors.  He also maintained the
support of the military and, while unconfirmed, reportedly increased
their pay.  Many police, however, continued to defect to the protests.

Demonstrations slowed in the first few days of the strike, but the
strike continued and even grew.  New unions and sectors of the economy
joined the protests, causing even more damage to Nigeria’s economy. 
Though docks and shipping remained open and active, the strike nearly
completely shut down oil fields and oil production.  Importers of
Nigerian oil grew increasingly concerned at what would happen if the
strike continued much longer.  The Nigerian government, too, was
extremely worried about the damage to the Nigerian economy caused by the
strike.  Ninety percent of Nigeria’s exports came through oil, and the
government obtained 80% of its revenue from sources related to oil
production.

On 16th January, President Jonathan responded to pressure by partially
reinstating the fuel subsidy.  The price of fuel fell to 97 Naira per
liter, which was substantially less than the 141 Naira after the subsidy
was removed, but still quite a bit more than the original price of 65
Naira.  The unions called off the strike in response to the move, and
protests ended after that announcement.