Politics
Subsidy removal: Beyond Tinubu, Kyari’s personal interests
Subsidy removal: Beyond Tinubu, Kyari’s personal interests
By Mohammed Usman
Sahara Weekly Reports That One of the major highlights of the new administration of President Bola Ahmed Tinubu has been the suspension of the payment of subsidy for premium motor spirit, PMS, commonly called petrol.
Though there have been so many reforms introduced into the system since inauguration on May 29, 2023, the removal of fuel subsidies seemed to have been the most daring move ever made by any administration.
Come to think of it, as critical as fuel subsidy removal is to the turnaround of the economy, successive governments have made brick walls in their attempts to end the subsidy regime.
And, ever since that May 29th, 2023 pronouncement, a lot of dusts has been raised from different quarters, either from uninformed, or from the camp of those who benefited, albeit criminally or otherwise, while the subsidy regime held sway. And a lot of water has passed under the bridge too, including threats of strike.
However, it is pertinent to dig deep into this matter. Was removing the oil subsidy the right step in the right direction, or was it another government’s way to punish the masses?
Some say it is a wicked act by the president, Bola Ahmed Tinubu, aimed at impoverishing the masses further. Others say it is the handiwork of the group chief executive officer, GCEO, of the Nigerian National Petroleum Corporation, Mallam Mele Kolo Kyari. In this regard, the two top government functionaries have been the objects of attacks and accusations both in beer parlour discussions and in the press.
However, to the informed, this remains the most courageous move to place the country of the strongest path to its economic recovery.
The concept of fuel subsidy is not new to our national discourse. In fact, subsidy has been in place in Nigeria since the promulgation of the Price Control Act in 1977. It was put in place to cushion the effects of the global inflation of the 1970s.
In recent years, rather than being a blessing, subsidy payments have placed a huge economic burden on the government. The sectors that were affected negatively were the educational and health and housing sectors.
In justifying the subsidy removal, the government said subsidy removal would free up public funds for more meaningful infrastructure and developmental programs that stimulate industrialization, create jobs, economic growth and social prosperity.
For example: Almost N12 trillion spent on subsidy in the last four years is more than sufficient to develop any of the following projects: 2,400, hospitals of 1000 bed capacity across 774 local government areas; or 500,000 new houses to provide shelter to over 3.5 million Nigerians; or 27GW of electricity generation; or skill up and provide education up to tertiary levels for over 2 million Nigerians.
It also said it would create a market reflective downstream, which invariably stimulates more downstream investments, especially in the domestic refining space, thereby creating more jobs, prosperity, and growth.
The removal, according to the government would eliminate the unhealthy price arbitrage with neighboring countries thereby preventing the diversion and smuggling of gasoline outside the nation’s borders which bleeds our economy as well as reduce corruption surrounding internal product diversion as many marketers procure gasoline at subsidized regulated wholesale prices but still sell at deregulated retail prices.
It stated that the rich benefit more from the subsidy than the poor as they have higher number and capacity of vehicles to buy more gasoline; removal of the subsidy creates an opportunity to redistribute this benefit directly to those who need it more.
Subsidy removal also enables responsible gasoline consumption, which reduces waste as the prices are more market reflective, and the demand for the product will rebalance itself with the new price realities.
It equally allows the full recovery of upstream revenues, which enables reinvestment required to grow our national petroleum production and reserves and overall forex earnings.
The removal also would strengthen the naira as the growth of our foreign exchange earnings combined with reduction in product consumption reduces pressure on forex, thereby strengthening the naira.
It would also reduce product scarcity, opening market reflective prices to bring in more players, and create a more efficient market, thereby reducing fuel scarcity and its adverse effects on the economy.
The removal is also expected to reduce the growing and unsustainable budget deficit and, consequently, the debt burden, creating a more robust economic and sustainable future.
Successive governments had sunk trillions of naira into the subsidy payments. In 2006, the Obasanjo regime earmarked N1.9 trillion for these payments. Do not forget that at the period under review, naira exchanged at N130 to a dollar, making the amount $14.6 billion. This amount was to spike in 2007 when the same government spent N2.3trn, or $17.96bn, with naira exchanging for N128 to a dollar.
The above amount either tripled or quadrupled under the Yaradua/Jonathan administration as well as the Buhari administration. Now that the dollar is hovering around N800 in the exchange rate, one wonders what would be the fate of the economy in the next six months had the subsidy stayed.
Probably, this would have been the basis of the constant warning from international agencies of the dangers of accommodating this burden called subsidy. Prior to the removal of the subsidy, there were damning reports from the International Monetary Fund, IMF, and the World Bank concerning oil subsidy.
In its report titled, “Macro Poverty Outlook for Nigeria: April 2023” the World Bank said macroeconomic stability had weakened amidst declining oil production, costly fuel subsidies and other factors, further pushing millions of Nigeria into poverty, and that might become worse if the subsidy stayed up to June on 2023.
The report further said: “With Nigeria’s population growth continuing to outpace poverty reduction and persistent high inflation ratio, the number of Nigerians living below the national poverty line will rise by 13 million between 2019 and 2025 in the baseline projection.”
The bottom line is that in the last two decades, the fuel subsidy had cost the nation several trillions of naira. Even if it is narrowed down to between 2005 and now, the government spent approximately N21 trillion on subsidy payments alone.
The last regime of President Muhammadu Buhari, having realized the dangers ahead, stopped making provisions for the payment in June 2023 when his government would have expired. It was, therefore, incumbent on the incoming administration to pick up the gauntlet and do the needful.
From the onset of the existence of the subsidy, a certain set of individuals had smiled to the bank with each payment. It turned out that something that was done to assuage the suffering of the masses became an avenue for people with greedy and unscrupulous oil marketing companies to divert money into their pockets by sheer unconscionable criminality,
Speaking in a nationwide broadcast last Monday, President Tinubu reiterated on the benefit of the subsidy removal to Nigerians. He said in a little over two months, his government had over a trillion naira “that would have been squandered on the unproductive fuel subsidy which only benefitted smugglers and fraudsters That money will now be used more directly and more beneficial for you and your families.
“For several years, I have consistently maintained the position that the fuel subsidy had to go. This once beneficial measure outlived its usefulness.
“The subsidy cost us trillions of Naira yearly. Such a vast sum of money would have been better spent on public transportation, healthcare, schools, housing, and even national security. Instead, it was being funnelled into the deep pockets and lavish bank accounts of a select group of individuals.
“To be blunt, Nigeria could never become the society it was intended to be as long as such small, powerful yet unelected groups hold enormous influence over our political economy and the institutions that govern it.
“The whims of the few should never hold dominant sway over the hopes and aspirations of the many. If we are to be a democracy, the people and not the power of money must be sovereign.”
However, notwithstanding the president’s speech, the organized labour ordered workers to resume strike on Wednesday after talks with the government failed to yield positive results.
This is in spite of palliatives proposed by the federal government to ameliorate the perceived suffering the fuel subsidy removal would throw up.
This raises the question as to what the Nigerian labour is up to. Is labour truly yearning for the progress of Nigeria, or is it being sponsored by enemies of Nigeria?
At this critical period of our nation, we urge Nigerians to come together to support the good vision of the president to make the nation great, because from all indications, both the president Bola Ahmed Tinubu and Mallam Mele Kyari, the NNPC GCEO mean well for Nigeria.
Usman, a public commentator, wrote in from FCT, Abuja.
Politics
TINUBU RECEIVES PRESIDENT PATRICE TALON OF BENIN REPUBLIC, SAYS COOPERATION IMPERATIVE FOR ECONOMIC PROSPERITY IN WEST AFRICA
TINUBU RECEIVES PRESIDENT PATRICE TALON OF BENIN REPUBLIC, SAYS COOPERATION IMPERATIVE FOR ECONOMIC PROSPERITY IN WEST AFRICA
President Bola Tinubu says cooperation is imperative for economic prosperity in West Africa, noting that a lack of synergy between Nigeria and Benin Republic has been an encumbrance to mutual development.
Speaking when he received President Patrice Talon of Benin Republic at the State House in Abuja, on Wednesday, President Tinubu said Nigeria and Benin Republic share a lot in common, describing both countries as conjoined twins held together at the hip.
“We are one. No other nation like ours should be worried. What is affecting us is a lack of synergy. We have not developed the necessary economic synergy that will develop our two nations. We must have common economic principles and priorities. The economic programme you are developing through inter-ministerial collaboration is welcomed by me.
“We will support all of our private sector interests to facilitate prosperity in both of our important countries. I appreciate the urgency of your approach, and we welcome this. Leadership is sometimes defined by urgent action. Thank you for your quality leadership. We are together. I am not a backward looking person. I look forward. This is how I avoid missing steps,” the President said.
President Talon, who was at the State House to seek the support of President Tinubu on improving trade relations, ahead of the Economic Community of West African States (ECOWAS) Summit, described the relationship between his country and Nigeria as crucial.
He said Benin Republic is seeking stronger trade ties with Nigeria, emphasizing the free movement of people and goods between both countries.
“Benin has started implementing a national development plan which includes enhanced integration between Nigeria and Benin Republic. Our development plan includes taking into account what investments are required in Benin to enhance our integration with Nigeria in trade terms. It is true that many agreements have been signed to push our integration forward, but they have not been implemented.
“At the level of ECOWAS, we embrace free movement and integration, and at the African level, AfCFTA envisages this; so we need to move urgently to make this a reality.
“Our investment programme must be revised to factor in all factors of the Nigerian economy. We seek to set up an inter-ministerial technical committee that will jointly prepare a draft document for our legislatures. I am ready to sign an executive order to appoint members of the council to advance mutually beneficial cooperation across sectors.
“There have been difficulties bilaterally on the issue of smuggling. We will work hard to coordinate and ensure that your interests are protected as we integrate our economies. I want us to make history together,” President Talon said.
Chief Ajuri Ngelale
Special Adviser to the President
(Media and Publicity)
December 6, 2023
Edo 2024: APC Have Being Vindicated – Peter Uwadiae
By Elvis Omoregie
Ahead of the much talked about Edo 2024 Governorship Election billed to hold September 21th 2024, there have been series of political activities in Edo State including the recent declaration by the deputy governor of the Comrade Philip Shaibu, “against all odds”, to contest the forthcoming election.
As the announcement by the deputy governor continue to elicit reactions couple with his recent interview with journalists in Abuja, where he said: “With the 2024 Edo governorship election fast approaching, the State can not afford to experiment again with someone who does not understand the politics of the State or the needs of the people.
“Edo people need practical governance and you cannot experiment again with somebody that do not understand the politics of a good State and the needs of the people.
“You cannot know the need of the people when you don’t live with them. So for me, competence and experience should be the watchword as we go into election in 2024.
“Who is competent? Who is more experienced? Who will hit the ground running from day one?
“Are we going to experiment with a new person again? And the person will spend the first four years learning on the job and he will spend another four years trying to embezzle, set up his businesses in the name of consolidating on the gains of the first term?”
In a swift response, the leading opposition Party in Edo state, the All Progressives Congress (APC) through its Media Publicity Secretary, Peter Enosoregbe Uwadiae Igbinigie Esq told journalists last week in Benin that the deputy Governor’s comments were only affirmation of the position of the Party about the poor performance of the Obaseki’s led Peoples Democratic Party (PDP) administration in Edo in the last 7years.
Here we bring you the full response, and comments on other issues!
We; the APC have been vindicated by the comments of the deputy Governor, Philip Shaibu particularly as it relates to the capacity of the Governor, himself.
From the horses mouth; the deputy Governor has said Edo State cannot afford to experiment again for another eight years.
The import of that statement is that Edo State has been experimenting in the past seven and half years and if someone or any Government is experimenting, it therefore means the best cannot come from an experimentation!
It means that the Governor is still learning or there are lot of things he is learning to do or he ought to do and he did not do.
And governance should not be a learning ground and the APC have consistently maintained that the Governor has fallen short of the capacity which is required to manage a State as complex as Edo.
Looking back, what has the Governor been able to bring to the table? All we have seen in the past seven years; is nothing but obvious distortion of the smooth sail of governance from that glorious era of Senator Adams Oshiomhole, to what Edo people desired but which he couldn’t provide.
When Oshiomhole was Governor in Edo, there were whole lot of things he did; in terms of massive infrastructural development, human capital development, social welfare amongst many others.
He gave Edo State a face lift and made us understand the true meaning of dividends of democracy thus laying the foundation of good governance.
Unfortunately after his departure, all these beautiful legacies were pulled down instead of them being improved upon by the Governor.
The Edo library, and Central hospital were demolished, Edo liaison offices in Port Harcourt, Lagos and Abuja were sold out.
Now, private sector driven projects are taking over; all serving as conduit pipe to drain the collective scarce resources of the people.
Can the Governor tell us the State’s equity shares in these investments? We don’t have!
Now, what has happened to the red roof revolution of the Adams Oshiomhole’s era in the education sector?
I watched on television few weeks ago where school children were still lying on the ground to write, no furniture; a true reflection of the state of affairs in our schools against Obaseki’s propaganda of Edobest.
The APC is glad that Edo people have begun to hear the true report of the performance of the Obaseki’s administration from the man who is number two in ranking.
If the next in command can speak in that manner, it shows that Edo State has lost it!
If my deputy say I am experimenting, it shows that he even knows it more than myself.
Now, how has Governor Obaseki impacted on the market women? When he came on board, he promised to eliminate all forms of ticketing and touts but today the situation is worst.
The funny thing is that suppose the money collected is being used for the development of the State, it would have been a different thing.
But these monies are collected and goes into private pockets.
You drain these people, you double tax them, and the resources is not used to better their lives.
Well, we have gotten to that level wherein Edo people have to take the APC seriously.
It is absurd that a Government will be experimenting with the lives of its people and in the PDP today, the news is rife that the Governor also wants to bring a successor who will continue with the experimentation. That is why we hear the deputy Governor shouting and saying that experimentation should not be allowed again.
In any event, APC has become the beautiful bride in Edo; the Party to beat!
We have demonstrated it and we want to sustain that momentum. At the senatorial level first time in the history of politics in Edo, PDP could not even get a senator to represent them at the national Assembly.
Also, at the House of Representatives, out of the total nine available slots; the APC has six, Labour Party has two and PDP only one.
Be that as it may; it is a reflection of the acceptability of the APC in Edo State and beyond that in the State House of Assembly election, the APC has nine out of the 24 seats.
It is a good showing for a political Party that is in the opposition.
And what is again most worrisome, the PDP State secretary has often times condemned the attitude, and methodology of governance of the Obaseki’s administration.
He said the Governor has not done well, and he wants to also impose a candidate on them; an attempt the Party would resist!
Also, Leaders of the PDP are crying that this is the first time since 1999 they have gotten the worst Governor in Obaseki.
Hence they would not want a repeat of this anymore.
The discerning conclusion from that scenario is that if the Governor is allowed to perpetrate his experimentation on Edo people by bringing in someone to take over governance from him, we are going to be in another eight years of doldrum, we are going to be in imprisonment.
So, we have an alternative that will positively change the negative narrative in Edo and that is the APC because experimentation should stop in the State.
Going into 2024, Edo people expect a better approach to governance and Government.
In that respect, the APC will present its best to drive its programs and we can assure that our Party will conduct its primary in the most transparent manner, that will usher in a candidate who will be generally accepted, a man who will represent the common interest of Edo people.
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