Thursday, December 22, 2011

REMOVAL OF FUEL SUBSIDY;in whose interest?

After the town hall meeting which had various actors of our economic sectors present, it is evident the issue of subsidy is not going anywhere, as it has now become an issue of WHEN It would commence and HOW it would be commenced.

Present were members of the civil society and leaders of government agencies such as Madam Okonji Iweala, Lamido Sanusi Lamido, Ben Bruce, Adams Oshiomole, Femi Falana, Olisa Agbakoba SAN and Alison Madueke. Present were also champions in business such as Dangote,Femi Otedola, seasoned journalists and youths were also duly represented.

Back however to the big word SUBSIDY, let's go back to the facts. Subsidy cost us over 1 trillion naira to fund yearly, and we borrow just to fulfil this righteousness. Last year,we borrowed a total of about 850 billion naira,all of which was not sufficient to fund the subsidy. Government borrowing is going higher and this is an opportunity to cut down on it.

Petrol is delivered to Nigeria at 140 naira but government gets it to the people at 65naira, meaning 75 naira is paid from government coffers. Though in the inter lands it is sold at between 80naira - 100naira. We can blame factors such as bad road transportation and destroyed nnpc pipes for this trend.

According to Madam Iweala, we consume 35 million litres of fuel daily,part of it which is diverted by the members of the so called CABAL (Nigeria's imaginary group of scoundrels responsible for all our pain) into neighbouring countries. Also one-third of government expenditure which should be used on providing health services, security,employment,development of infrastructure and power is wasted on subsidy. However the government fails to account for all the monies that have been spent so far.

No doubt,the argument for subsidy is sound from the view of the economy,if removed it would give the economy a boost, providing an environment for private sector participation. Asking a person to invest 4 billion dollars the cost of building a refinery in Nigeria and limit his profit margin is not a good business deal. Illustrations of the gains of subsidy is visible in the communication, aviation and agricultural sectors

Another option which also could be taken by government is subsidising local production and refinery of oil and not subsidising on import. As addressed in the meeting,the issue of trust is also fundamental. We have been deceived time and time again. Someone is probably planning how much more he would have to steal when subsidy is removed and he is awarded a larger allocation for his responsibilities.

If government cannot show us that it is dedicated to preventing waste by fighting corruption and plugging the
loop holes in government expenditure. It would be difficult to convince Nigerians that this administration means well. If some people are above the law and cannot be prosecuted,how can we have confidence in the government.

The people can play their part by continually engaging government, demanding credibility and accountability. Always inquire into how you are being governed. Take full use of the FOI Act, let our government representatives explain to us everything they do and why they do it. We cannot continue to condone a free for all dip into government coffers at our discomfort.

No more mago mago is allowed in government. Let us promote the course of good governance.

Adedunmade Onibokun Esq.
Sent from my BlackBerry® wireless handheld from Glo Mobile.

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