WHERE ARE THE GAINS FROM THE REMOVAL OF SUBSIDY?

                                                                       

Nigerians are worried because they cannot see any infrastructures established with the funds the Federal Government derived from the removal of petrol subsidy in spite of all the juicy promises made by President Goodluck Jonathan, the governors and some of his ministers. Before the partial removal of petrol subsidy, President Goodluck Jonathan explained that after consultations with segments of the society, “many have now been appreciative of the need to totally deregulate the economy so as to open it for investment as well as stimulate development from the proceeds”. At the 2011 Christmas Carol held at the Banquet Hall of the Presidential Villa Abuja, President Jonathan said the removal of fuel subsidy would bring only temporary pains, which will fade as Nigerians begin to reap the benefits of the removal. He said, “I promise that the pains will not be the way people are thinking. The pains will be temporary, and after few weeks or months, Nigerians will be better off, the economy will be repositioned”.

The governors under the Nigerian Governors’ Forum said subsidy removal “will create employments and begged Nigerians to “sacrifice” and “trust” them to properly utilize funds that would be saved through the policy. The Chairman of the Nigerian Governors’ Forum and Governor of Rivers State said, “It is a sacrifice that we must make as a nation for the country to move forward”. However, it was later revealed that the governors only backed the removal of petrol subsidy so they could have more money to control since the Federal Government would no longer need to make deduction from their share of the Excess Crude proceeds to fund the subsidy scheme.

On January 1st, 2012, when Nigerians were preparing to celebrate the new year, the Federal Government announced the removal of petrol subsidy which caused the price of the commodity to jump from N65:00 to N141:00. However, spontaneous protests across the country compelled the Federal Government to reduce the price from N141:00 to N97:00; making the subsidy removal to be partial. As the protests persisted across the country, President Goodluck Jonathan mobilized some of his ministers and aides to speak potently in support of the subsidy removal. Prominent among them were the Minister of Petroleum, Mrs. Diezanni Alison Madueke, Minister of Finance and Coordinating Minister for the Economy, Dr. Ngonzi Okonjo-Iweala, Central Bank Governor, Mallam Sanusi Lamido Sanusi etc.

These government officials came on air to enumerate the great benefits the country would gain from the removal of petrol subsidy. Then, Dr.Ngonzi Okonjo- Iweala said the removal of petrol subsidy was to safeguard the future of Nigeria and her children. According to Iweala, if Nigeria didn’t take the measures, the country would be forced to experience such hardship “that would frustrate the future of our children and we will be like some countries like Greece which kept on borrowing until they got to the crisis situation that they have found themselves”.  She went further to say, “The Federal Government has decided to channel its own share of the budgetary savings from the elimination of fuel subsidy into a combination of specific programmes that will stimulate the economy and alleviate poverty through the provision of the following: critical infrastructure-the proposed infrastructure projects are: “specifically, TAM for the Port Harcourt Refinery will be carried out in the First Quarter of 2012, Niger Delta development projects; road projects, water and agriculture development, irrigation, rail transportation projects; electrical power focusing on hydropower and Greenfield petroleum sector projects to be located in Bayelsa, Kogi and Lagos States: safety net projects; maternal and child health services, public works/youth empowerment programmes, urban mass transit scheme and vocational training scheme. The Federal Government is launching a SURE Programme that encapsulates all these alleviating programmes. Structures have also been developed to guarantee adequate oversight, accountability and implementation of the various projects”.

When Nigerians doubted President Goodluck Jonathan’s sincerity on the proper use of the funds from the removal of petrol subsidy as previous governments have in the past, increased the prices of petroleum products with the same promises to use the proceeds to provide infrastructures but failed to keep their promises after such increases, Dr. Iweala said, “….. We plead for patience. The impact of this will begin to show soon. We intend to start publishing the amount we are saving from this withdrawal of oil subsidy monthly and also where we are directing them. Nigerians will be participants in this process. In few months prices will begin to come down depending on market forces”. President Jonathan claimed subsidy had gulped N1.43 trillion by 2011 end. He said the government would realize N1.134 trillion from the removal of petrol subsidy. Thus, as petrol now sells at N97, which is 50 percent increase from the previous price of N65, the Federal Government would have ranked in about N1 trillion in the past one year!

Nevertheless, after one year of making these promises, there is nothing on ground to show for almost one trillion naira the Federal Government has realized from the removal of petrol subsidy! For instance, the Turn Around Maintenance of the Port Harcourt Refinery scheduled for the First Quarter of 2012 has not yet began. The construction of eight major roads, two bridges, six railways, 19 irrigations, healthcare centers for three million pregnant women, etc are yet to commence.    

Since the removal of petrol subsidy, has Dr. Ngozi Okonjo Iweala ever published the amount of money being saved from the withdrawal of fuel subsidy on a monthly basis as she promised? Also, has she been publishing what the funds are being directed at? Can Dr. Ngozi Okonjo Iweala speak passionately on the benefits from the withdrawal of oil subsidy on Nigerians the way she spoke in its favour when the withdrawal commenced? Where are the buses for the urban mass transit which the Federal Government promised? Where are the palliatives President Jonathan and the governors promised Nigerians?

Immediately after the removal of petrol subsidy, the Federal Government promised Nigerians better life under the Subsidy Reinvestment Empowerment Programme (SURE-P). Under SURE-P, the government promised the construction of eight major roads and two bridges, provision of healthcare for three million pregnant women, six railway projects, 19 irrigation projects etc. Now, it is time to ask questions and the questions Nigerians are asking are: (a) where are the eight constructed major roads located? (b) where are the two  constructed major bridges sited? (c) where are the healthcare centers for the three million pregnant women located? (d) which part of the country are the 19 irrigation projects situated? Nigerians want President Jonathan, the governors, Minister of Petroleum, Mrs. Diezani Alison Madueke, Minister of Finance and Coordinating Minister for the Economy, Dr. Ngozi Okonjo Iweala and the Central Bank Governor, Mallam Sanusi Lamido Sanusi, to answer these questions because they championed the cause to remove petrol subsidy!

When the Federal Government removed petrol subsidy and promised to use the proceeds to provide the above mentioned infrastructures, Nigerians made it known to the government that the absence of infrastructures in the country was not as a result of lack of money but due to corruption because every year budgets are made for them. Also, Nigerians doubted the sincerity of government to use the proceeds from the removal of petrol subsidy for the above mentioned infrastructures since previous governments have also removed subsidy from kerosene and diesel without anything to show for the money the government received. But Dr. Ngozi Okonjo Iweala assured Nigerians of the judicious use of the funds. Now, let her come on air and tell Nigerians where those projects they promised in January 2012 are sited. But I do not blame the likes of Dr. Ngozi Iweala rather I blame the Nigerian masses, Nigerian Labour Congress, Trade Union Congress, Save Nigeria Group, Civil Liberty Organization and other civil society groups who have refused to ask questions on how the subsidy funds are being used. Successive governments have failed to keep their promises because Nigerians don’t ask questions!

With the elimination of petrol subsidy, the standard of living of ordinary citizens of this country has fallen drastically because the price of everything has gone up. A sachet of pure water now cost N10 as against the previous price of N5. Small and large scale businesses are folding up due to high cost of operation; leading to increase in unemployment rate.

Thus, from all indications, the Federal Government has failed the masses once again because there is nothing to show for almost one trillion naira that was realized from the elimination of petrol subsidy in 2012. Since the Federal Government has failed in its promises, it should therefore revert the pump price of petrol to its former price of N65. This is the only way to restore the confidence of Nigerians on the President Jonathan led administration. Without reverting the price of petrol to N65, President Jonathan shouldn’t think of a second term.



Dear VME readers, have you seen the gains from the removal of subsidy in the country? Is it not the same old story? Please, leave your comments in the comments section. Thank you.