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. The majority of Nigerian oil reserves were in the South. The primarily Muslim northern 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.