The Nation Newspaper

Tag: Subsidy

  • Subsidy payment will end fuel scarcity- Minister

    Subsidy payment will end fuel scarcity- Minister

    The Minister of Information and Culture, Alhaji Lai Mohammed, says the approval of N522 billion by the National Assembly for subsidy payment will end fuel scarcity in the country.

    Mohammed said this when he paid a courtesy visit to the Corporate Headquarters of Media Trust Ltd., the publisher of Daily Trust and Weekly Trust Newspapers.

    “What was approved Tuesday, the entire N574 billion, N522 billion of it is for subsidy while the balance is to continue the war effort in the north eastern part of Nigeria.

    “Now people asked us why did we wait for this to happen. The truth of the matter is that the money in 2015 budget for fuel subsidy was exhausted and we had to go back to the National Assembly to ask for approval.

    “We have the money, we could easily have paid them but that would be unlawful to be spending without the appropriation.

    ”But I can assure you that by the grace of God, Nigerians will not have to experience this kind of scarcity again.”

    The minister stressed the need for a standing media team and government to interact on national security, to ensure mutual understanding.

    He said the visit was to commend the Media Trust Ltd for reflecting his party’s views and executing editorial independence and profession in the run up to the general elections.

    In his response, the Chairman, Editorial Board of the Media Trust Ltd., Alhaji Kabiru Yusuf, commended the minister for the visit, saying this kind of visit would help the company to engage government on national issues.

    “Let me say thank you Honourable Minister for taking trouble to be here. You have been here before but we are glad to welcome you and also wish you well in this difficult job of being Minister of Information. We wish you God’s guidance in your duties.”

     

  • Subsidy: Time to let go

    Subsidy: Time to let go

    The fuel queues are back – as if you didn’t know that already. The tragedy isn’t just that OPEC’s one-time sixth largest exporter of crude has again suffered another crushing relapse of the familiar plague of dry pumps – no thanks to the feud between fuel importers and the finance ministry – it’s like the nation has come under a spell of some ancestral curses!

    Trust Nigerians for their inventiveness, guess they have since moved on; while we are back to the same old wearisome arguments about whether or not the subsidy exists, our go-go nature appears to have gotten the better of us. Majority – call it the silent ones if you like – it would appear, could no longer be bothered with either the economics or even the semantics of fuel subsidies, they have since swallowed the full pill of deregulation – this time through the back door. Scarcity or not, I know for a fact that you could purchase fuel in some stations in Lagos without as much as breaking a sweat – so long as you are willing to part with N140 for a litre in the deregulated market downtown! Seems one moment when Nigerians wouldn’t mind to cut their noses – even if temporarily – to get going!

    Truly, the subject of fuel subsidy never ceases to fascinate. As in the round leather game of football, it is one subject that every Kasali, Chinedu and Usman would claim, with some air of certainty, some degree of knowledge if not expertise. You know why? Everybody is involved – from the jerry-can clutching vulcanizer to the barber next door; what about the welder or even the ubiquitous taxi driver all of whom the liquid gold has come to mean the difference between life and death?

    Yes, everyone is involved.

    Agreed, subsidy is a touchy subject. I have seen otherwise brilliant minds relapse into some wild, witless garbage when the subject is fuel subsidy. Many would rather be politically correct rather than risk ruffling feathers. And so argument persists that simply because oil is of nature’s finest gift to us, we can continue to dispense with the niceties of economics!

    To be sure, I have looked at the contending arguments; it seems to me that the difference between the most vociferous proponents of fuel subsidy removal and their opponents is actually more shadow than real substance! Forget what the marketers and their hordes of middlemen say; the truth is that they want the subsidy regime to continue; it is their surest route to unearned wealth. What about the bureaucrats, the men and women wielding awesome powers over our lives? It is their surest guarantee of raw, invisible power – without control. As one would imagine, the politicians want it for a different purpose; for them, it is a fascinating subject for politricking any day.

    Did I hear the “ogas at the top” describe the subsidy regime as “unsustainable”? What their lucre-addicted lordships meant to say is that they could do with more of freshly-minted wads in the piggy bank to do as they please.

    The irony of course is that a section of the hoi polloi actually believes the lie that the petrol and kerosene subsidy – together with its impregnable infrastructure of graft that services it – actually comes close to their share of the proverbial national cake! That for me is the most tragic part of the raging debate.

    Is there really a subsidy? I have heard the question over and over again. To the question I say – we wouldn’t be who we are if we are not found debating whether or not the weekend May 14 Platts reference price of $718.49 per metric tonne (that is N105.55 per litre) is real! Note that this is not yet reflective of distribution costs as well as the marketers’ margins!  With petrol price officially pegged at N87 per litre, the above should ordinarily solve the arithmetic.

    Next question – why can’t the federal government build new refineries? Or its variant – why can’t the government compel the International Companies (IOCs) to build refineries in the country? Or still, get the private sector to build new refineries? Good question – all of them!

    Let me proceed from the known to the unknown. Again, as if we don’t know, the reality is that OPEC’s leading crude oil exporter refines only a miniscule fraction of its domestic fuel needs. Daily requirement for petrol is said to range from 40-45 million litres daily of which the four refineries combined is said to deliver a miserable 10-15 percent. To bridge the gap, we rely on imports at deleterious costs to our foreign reserves and the larger national economy. From an ordinarily hefty subsidy bill of barely N250 billion in 2011; the nation has since the literally broken the banks – spending close to a trillion on kerosene and petrol alone annually!

    So why can’t the government build new refineries? The answer: the same reason the government is unable to bring back the national carrier; it’s the same argument about government’s inability to fix the multiplicity of our roads; the reason the power sector is considered as jinxed! I daresay here that the old cliché about the government not being good at business is true only to the extent that our government lacks both the means and the discipline to run a modern enterprise! The tiny Island country of Singapore is a living exception to that rule!

    As for getting the IOCs to build new refineries, it seems rather too easy to overlook the terrible effects of government’s meddlesomeness on the downstream sector. Does anyone still remember that the first refinery in the country was actually built not by government but by Shell? It seems aeons ago when the motorist in Lagos bought fuel at a different price from his compatriot in Maiduguri! That was when market ruled – long before our leaders pronounced that money was not our problem but how to spend it!

    To my main point. There comes a time in the life of a nation when citizens just have to make hard choices. The current season would appear such a time. The simple truth is that the nation cannot afford, even if it wants, to sustain the current regime of price support called subsidy. Something simply has to give. Moreover, I have stated elsewhere that the subsidy regime is unfair to the extent that the burden is regressive. In short, it is time to let go! Agreed, it is not the end; it’s one sure step on the path to dismantling the infrastructure of fraud currently sapping the nation’s vital juices. That done, with supporting policies, the goal of local refining might actually be closer than many would dare to imagine. I rise!

    The above was first published on May 19 this year.

    Kogi: The law can’t be an ass!

    Yours sincerely joins the rest of the good people of Kogi to mourn the unfortunate demise of Prince Abubakar Audu, the flamboyant All Progressives Congress candidate in weekend’s gubernatorial election. It seems one of the cruel ironies of life that the good people of Kogi are now left to rue over the possibilities in his planned return to the Lugard House complex 12 years after.

    I am not entirely surprised at the myths being spawned in the aftermath of his death. Since when have we stopped being superstitious?

    Or the permutations and the frenzy of varied interpretations as to what should be the way forward. It is not entirely surprising that emergency lawyers and road-side activists appear to have hijacked the debate in the full blown laissez-faire season of unreason! Reminds me of the African saying that all manners of knives are to be seen at the death of an elephant!

    In Kogi, the issue of the limits of the law comes to the fore. So is the majesty of public policy. Now, it seems so easy to forget that 21 parties contested in all with 42 candidates and their running mates – on the ballot. We are talking of an election that was practically concluded except in some odd 91 polling units spread accross 18 local government areas in which the entire number of registered voters is a mere 49,953 and which the voters had left no one in doubt about their choice! Yes, the All Progressives Congress of Prince Audu Abubakar scored 240,867 as against the Peoples Democratic Party of Idris Wada with 199,514 votes.

    And now because INEC deems fit to fulfil all righteousness in given that the difference between the leading candidate and the runner up is some 41,000 votes, some people have gone as far as to suggest that the exercise be aborted because the candidate of the leading party died mid-stream! Did the law not envisage this possibility when it made provision for running mates? And would anyone have dared to make the same argument if it was another candidate but the leading one that died?

    We have not reached the point where the law is deemed stupid – or have we?

     

     

  • The Emir and subsidy

    The Emir and subsidy

    •The issue is not subsidy but local refining of crude

    The call for the removal of petroleum subsidy, just got a boost, from the Emir of Kano, Muhammad Sanusi II. The former Governor of Central Bank of Nigeria (CBN) made the call while receiving a Life Time Achievement Award at the All Africa Business Leaders Award, in Lagos.

    Hear him: “Does it make sense at this time for government to continue paying petroleum subsidies? It does not! When you are not earning because oil prices are down, you have to shut down those expense lines that had been known historically to be the site of rent-seeking.”

    There has, however, been very stringent criticisms against the call. Senator Shehu Sani, said: “Decades of adoption of such capitalist strategies by many countries in the developing world especially Africa led those nation to economic quagmire and paralysis”.

    He further admonished: “The poor must not continue to pay the price for the corruption and mismanagement perpetrated by past governments”.

    In his reaction, the Nigerian Labour Congress (NLC) President, Comrade Ayuba Wabba, said: “There is no doubt that the former CBN Governor is no more connected with the people”. He referred to his call as “the language of the capitalists, the marketers and those who want to milk the country dry”.

    The cacophony of the voices represents the myriad of challenges facing the government of President Muhammadu Buhari over what to the do with the petroleum subsidy conundrum. For us, mindboggling corruption, is at the root of this national embarrassment. Indeed, it sounds like fiction, that Nigeria would shamelessly export crude oil, with all the employment opportunities and by-products, that local refining would gift us, only to import refined petroleum products, at inflated costs and huge arbitrage.

    The quagmire facing the present government is how to pass on to the citizens, the glaring costs of incompetence of the past governments.  They chose to neglect our refineries; and created, deliberately or inadvertently, a corps of parasites, choosing subsidy to bleed their country to death.

    With nearly all the old refineries almost derelict, and with regulation of the sector making it unattractive for private sector investment, the government which has limited resources to invest in new refineries, is therefore at a crossroads: can it dare the people and the likely inflation nightmare, if the subsidy is removed? Only if it can guarantee an improvement in the life of the ordinary Nigerians.

    But the Buhari government must quickly take a jump. It must choose to either source for funds to build new refineries, to support the aging ones in Port Harcourt, Warri and Kaduna, and save the people from suffering and the government from embarrassment; or it would dare the consequences, and remove the subsidy, and encourage private equity participation in the development of new refineries.

    In taking a decision, the government must weigh its capacity to rein in the criminal elements in the oil industry, who under the previous governments, have been in criminal collaboration with the government officials.

    This government must also appreciate the enormous sacrifices already made by the people, who have been taken on a long deceitful ride, each time there had been an adjustment of the price of fuel, with a promise to use the proceeds to renew the infrastructure.

    The government must indeed start by removing the corrupt component of the subsidy regime and pass the benefits to the people. For many, if they cannot trust the Government to block the leakages, how can they trust it, to use the gains from the removal well?

     

  • Subsidy removal call: Emir Sanusi under fire

    Subsidy removal call: Emir Sanusi under fire

    Emir of Kano Muhammad Sanusi II yesterday came under fire for calling for the devaluation of the naira and removal of petrol subsidy.

    Labour, a senator and others advised President Muhammadu Buhari to ignore the emir, describing his demand as not good for the poor.

    Heeding the call will take the economy back, rather than ginger it as suggested by the Emir.

    The emir, who is the immediate past governor of the Central Bank of Nigeria (CBN), spoke last week in Lagos, after receiving a Life Time Achievement Award at the All Africa Business Leaders Award West Africa.

    He said: “Does it make sense at this time for the government to continue paying petroleum subsidies? It does not! When you are not earning because oil prices are down, you have to shut down those expense lines that had been known historically to be the site of rent-seeking.

    “Fuel subsidy has to go, our tax base has to expand, value added tax (VAT) has to go up. We can’t continue having an economy in which we collect tax from oil, collect tax from telecoms companies, and then 60-70 per cent of the Gross Domestic Product (GDP) does not pay taxes. This is something that has to be looked at.”

    Sanusi added: “I know that the government has announced its position on exchange rate… It is wrong to continue to pretend that you can keep the naira at a certain level, when the price of oil is falling, without depleting your reserves. You have to make a choice.”

    Nigerian National Petroleum Corporation (NNPC) Group Managing Director Dr. Ibe Kachikwu, told the Senate during his ministerial screening that the president is not inclined to subsidy removal as things stand now.

    CBN Governor Godwin Emefiele has also said the governent would not devalue the naira, which is exchanged for N197 to the dollar at the official market.

    Yesterday, Senator Shehu Sani (Kaduna central) on his facebook page said: “I stand opposed to the devaluation of our national currency and; I stand opposed to removal of subsidy. Devaluing the naira and removing subsidy will worsen inflation, aggravate poverty and ignite a national uprising.

    “Decades of adoption of such capitalist economic strategies by many countries in the developing world especially Africa led those nations to economic quagmire and paralyses.

    “The poor must not continue to pay the price for the corruption and mismanagement perpetrated by past governments.”

    An economic analyst, Mr. Henry Boyo, said: “I think we should ask what should be the implications of doing either or both of those recommendations. If you devalue the naira, there are a numbers of things that will happen. You will find that the cost of production in Nigeria will go up. You will also find that this will have an intimidating effect on the rate of inflation. You will find also that if Nigerian industries remain uncompetitive, they will reduce capacity and lay off workers. That will mean an additional burden on the level of unemployment in the country.

    “You must recognise that the issue of devaluation of the naira is very closely tied to the issue of subsidy. On the other hand, instead of devaluing the naira, you follow a process that will actually make naira exchange rate to appreciate.”

    Trade Union Congress of Nigeria (TUC) President Comrade Boboi Kaigama, said labour would not accept any further devaluation of the naira or subsidy removal on petroleum products.

    “We see them as his personal views and we want to make it clear to him and anybody who wants to listen to his advice that it is not palatable to labour. We will never accept any further devaluation of the naira and we will not be part of the removal of oil subsidy.

    “The government should wait for the consequence of listening to this call because by removing oil subsidy, you are further impoverishing Nigerians.

    “We want a situation where those behind the subsidy scam are punished, then put our refineries in place, come back and discuss with organised labour and let us see whether it is feasible.

    “Otherwise, without putting refineries in place and putting palliatives in place to check increase in prices of goods and transportation and  you are calling for the removal of oil subsidy, I think you are very naive when it comes to looking at the consequence of the issue of removal of oil subsidy”

    Nigeria Labour Congress (NLC) President Ayuba Wabba described the call for the subsidy removal as anti-masses which will further impoverish Nigerians.

    The call, he said, reflected the fact that the former CBN chief has lost touch with realities.

    He said labour would continue to fight any policy or calls that will bring hardship to the masses.

    The former CBN governor, he said, was speaking the minds of the capitalists, marketers and those who want to milk the country dry.

    “We are not in support of that call. There is no doubt that the former CBN governor is no more connected with the people. This is the language of the capitalists, the marketers and those who want to milk the country dry.

    “But, we are happy that President Buhari is a former Petroleum Minister and he knows all the rot in the system. We urge him not to look back and we will continue to support him,” Wabba said.

    General Secretary of the National Union of Textile and Garment Workers of Nigeria (NUTGWN), Mr Isa Aremu, said the former CBN governor was right to have advised the in-coming ministers against “flattery’’ of the President.

    Buhari must also be wary of policy dictatorship that will further undermine growth and development as well as worsen poverty in the country, he added.

    “There is no choice for the President between policy sycophancy and policy dictatorship/policy ambush.

    “Emir Sanusi must rethink outside the box of neo-liberal IMF’s unhelpful policies of devaluation (which he commendably rejected as CBN governor).

    “Nigeria needs a new paradigm of bold policy choices and new star-words in place of boring ideological mantra of devaluation and subsidy removal.

    “The naira in recent times lost its value drastically to the existing devalued rate of N197 to a dollar.”

  • Oil marketers, govt dialogue over subsidy arrears

    Oil marketers, govt dialogue over subsidy arrears

    Oil marketers, including Oando and Mobil, have adopted moral suasion to woo the Federal Government to pay their fuel subsidy arrears.

    The Chief Operating Officer, Oando Marketing Company, a subsidiary of Oando Plc, Mrs. Williams Olaposi, gave this indication on the sidelines of the inauguration of Oando Truck Marshalling Yard 2, and Sapara Road project in Apapa, Lagos.

    She said the firms that were approved by the Federal Government to collect subsidies are law- abiding, and prefer dialogue to protest on the payment of subsidies arrears owed them by the government.

    She said oil marketing companies are corporate entities, which place the interest of the nation above personal interest, and would, therefore, not want to do anything that would affect the generality of the people.

    Olaposi said: “We (marketers) are corporate organisations; we are not going to down tools because we have not been paid subsidies by the government. We would continue to push for our subsidies until we are paid. We would not suffer the community, the good people of Nigeria, on the issue. We would not stop importing because that would amount to grounding the country to a halt.”

    She said the marketers  employed dialogue as part of efforts to identify with the resolve of the government of President Muhammad Buhari to fix the economy. Olaposi said the Chief Executive officers (CEOs) of oil marketing companies have been going to Abuja, the nation’s Federal Capital, to meet people who can considerably assist them in persuading the Federal Government to pay the subsidy arrears they have spent on importing fuel into the country.

    “We (marketers) meet with the Federal Government regularly on the issue of payment of subsidy arrears, which the government owes us. Our Chief Executive officers always in Abuja to meet the helmsmen of the Nigerian National Petroleum Corporation (NNPC); we are speaking with the think-tanks in the Presidency on the issue,” she added.

    Also, the Managing Director, Mobil Oil Nigeria Plc, Tunji Oyebanji said there was no where the major oil marketers had held the country to ransom over non-payment of their subsidy arrears. Fielding questions from reporters on why marketers still import fuel despite the huge subsidy arrears owed them, Oyebanji said the marketers are hopeful that the government would meet its debt obligations to them some day.

    He said the Mahammadu Buhari administration has promised to pay marketers their subsidy arrears.

  • Wabba warns against fuel subsidy removal

    Wabba warns against fuel subsidy removal

    Nigeria Labour Congress (NLC) President  Comrade Ayuba Wabba has warned against fuel subsidy removal as a pre-condition for investment in the downstream oil sector.

    He told The Nation that the Nigerian National Petroleum Corporation (NNPC) Group Managing Director Dr Emmanuel Kachikwu is not on the same page with President Muhannadu Buhari on the reforms in the oil and gas sector.

    He said the ongoing campaign of the NNPC boss for the removal of fuel subsidy does not align with the presidents’vision.

    “We are surprised that Dr. Kachikwu has failed to read the lips of his principal, who has consistently said he is not convinced that the vast majority of poor Nigerians can afford to bear the effect of the removal of the so-called subsidy on petrol.

    ”For us, the NNPC boss has his job clearly cut out for him. If he cannot assist Mr. President and the country in ensuring that our four refineries start working at optimum capacity within the shortest possible time; if he cannot come up with a do-able plan for the Buhari Presidency to establish new refineries to cater for the shortfall in our domestic petroleum products needs; if he cannot articulate a plan for us to establish refineries within and outside our immediate borders that will be refining our crude oil for export, adding value, creating jobs and making more revenue for the country, then he is the wrong man at this point in time to man the NNPC.

    “It is quite clear, and we have said this times without number, that all those campaigning for the withdrawal of fuel subsidy as a pre-condition for investment in the downstream sector of the oil industry are not friends of our country, and indeed the masses of our people.They must be kept at arm’s length,” Wabba said.

    The NLC helmsman argued that removing fuel subsidy tantamount to increasing the suffering of the average wage earner and the majority of Nigerians that do not earn any wages at all.

    “We will continue to resolutely oppose any such plan, and we will mobilise Nigerians in their millions to join us in this struggle,”he added.

  • The oil subsidy scam

    Former Governor Rotimi Amaechi recently said one of the reasons that caused a friction between him and former President Ebele Jonathan was his opposition to subsidy to petrol importers that ballooned from N300 billion a year  to N1.9 trillion. Amaechi was acting on behalf of the governors of the country then  as leader of the informal association of governors  forum. Dr. Jonathan by this time had been pocketed by the cabal of corrupt petrol traders who were also funding generously the PDP and enriching those in the corridor of power . The then president apparently realized at a point that there was something odd in a country spending more money on petrol subsidy than on development and wanted to do something about it. This led him to increase the pump price of petrol but did not have the backbone to resist public outcry  and quickly reduced what he had been advised as the true price of gasoline. The hostility of the public arose from their perception of the rampant corruption in the country. People felt they were not prepared to make sacrifice while the number of private jets was increasing daily. The president himself celebrated this as an index of prosperity  in the land where Nigeria’s rebased GDP gave us the appearance of a rich country and rich people. His so-called coordinating minister of the economy was everywhere alluding to this manufactured achievement of economic prosperity to the discomfiture of the ordinary citizen. Stories were told of washermen, carpenters, garbage collectors being asked to fill forms that they were petrol importers and being subsequently paid billions of naira as subsidy. Young children of party bigwigs became billionaires overnight.

    This jamboree went  on for years until the country nearly went bankrupt following low price of crude oil in the world market forcing the corrupt government to shine some light on the oil imports sector. It found many  people culpable and made some noise and took some people to court including party top dogs or their children but it was all motion without movement for no one has been convicted  neither has money been recovered. To make matters worse, some of the people involved also ruined some of the country’s banks  while the huge foreign reserves Obasanjo left was drawn down on  subsiding this corrupt fuel importation. This  is how we got to this juncture of broken down four refineries and huge importation of refined fuel  which is an embarrassing situation for an oil producing country. The subsidy guzzlers were not interested in functioning refineries. They also never thought of selling the refineries  as part of their market driven economic reforms. Obasanjo had gotten private  operators interested in buying some of the run down refineries but they preferred the so-called annual  turn around contracts award  for the refineries. As usual these contracts went to party hacks who knew nothing about refineries. Instead of calling on those who built the refineries to rehabilitate them they gave the contracts to traders who simply pocketed the huge amounts given them while making some donations to the ruling party. They did this annually with impunity damning the people especially those with conscience to protest or go to hell.

    Now change has hopefully come and we hope and pray that things will change for the better. President Buhari has cautiously said he will not rush to take a decision on oil subsidy. He said he will study the situation first. But it is clear from the several studies done and advice by experts and friendly countries and development partners that that the oil subsidy and the oil sector generally constitute the bedrocks of corruption in Nigeria. We cannot be talking of fighting corruption while dilly-dallying on the oil subsidy issue. If the president does not strike while the iron is hot, subsidy beneficiaries with their enormous resources will mobilize to ensure the failure of its removal. Surprise is a well known military strategy and this president with his huge goodwill  should make up his mind quickly. Besides in the last two months, most Nigerians have been buying fuel at deregulated prices ranging from 100 to 130 naira a litre. If this is the price to pay to release money going into subsidy for development we should be prepared to pay it. Imagine what two or three trillion naira that was being spent for subsidy by the Jonathan government  can do for the development of this country. Delaying a decision on this issue may haunt us in the years to come especially if this government allows the oil oligarchs to mobilize against subsidy removal. The right policy is deregulation. Let the market determine the right and correct price of gasoline and let all who feel they can make profit engage in fuel importation and sell all the refineries at give away price to oil companies engaged in oil production in Nigeria or if they are not willing to buy  them, sell them to those who can run them but certainly not party people and preferably to foreign investors and I repeat at a give-away price of even a dollar provided the buyers promise to put them back into oil refining.

  • Amaechi: fuel subsidy under Jonathan rose from N300b to N1.9tr

    Amaechi: fuel subsidy under Jonathan rose from N300b to N1.9tr

    •‘Wike afraid Buhari’ll make me a FEC member’

    Former Rivers State Governor Rotimi Amaechi has said subsidy payment under former President Goodluck Jonathan rose from N300 billion to N1 trillion without justification.

    He said his successor, Nyesom Wike, is jittery that President Muhammadu Buhari would make him a member of the Federal Executive Council (FEC).

    The ex-governor spoke at a reception organised in his honour in Abuja on Sunday night.

    Amaechi noted that since Wike and members of the Peoples Democratic Party (PDP) in the state were jittery that his appointment would be the main determinant of the state politics, they have moved to tarnish his image in the eyes of President Buhari, who detests corruption.

    He said besides disagreeing with  Jonathan on his management of the economy, “I never insulted him.”

    Amaechi explained that he incurred the wrath of Jonathan when he decided to contest for the chairman of the Nigeria Governors’ Forum.

    The former governor added that Jonathan got angrier with him when he rejected the fraudulent N1.9trillion Petroleum Support Fund (oil subsidy) claim.

    Amaechi recalled: “One day I was in a meeting with Mr. President (Jonathan) and the argument was the $1.9trillion for oil subsidy. I told him as the chairman, Governors Forum I will not support it. I said your Excellency, we are already in court on the issue of oil subsidy. Since that day the ex-President abused the hell out of my life.”

    According to him, people misconstrued his strict adherence to principles for stubbornness because he disagreed with the former President on the management of the treasury.

    He went down memory lane: “I can tell you how my trouble with the former President started. As chairman of Governors’ Forum, the oil subsidy was N300billion under President Obasanjo. Under President Yar’Adua subsidy was N300billion. Six months of president Jonathan oil subsidy rose from N300 to N1.9trillion. Is it that we now doubled our population or bought more machines, began to manufacture things? As chairman of the Nigeria Governors’ Forum, I was in a position to get my own share of the N1.9trillion. I chose the path of honesty and truthfulness. You cannot catch me doing such a thing.”

    He said some of his colleagues in the forum, including the former Governor of Niger State, Babangida Aliyu and the former Jigawa Satate Governor, Sule Lamido were also against Jonathan’s style of leadership but they failed to pullout of the PDP with him and other governors.

    Amaechi attributed the victory of the All Progressives Congress (APC) to the integrity and popularity of President Buhari, noting that his instincts never ceased to tell him that his party would be victorious.

    Being the director general of the Buhari Presidential Campaign Organisation, he hailed his team for their tenacious struggle and success throughout the campaign.

    Recalling how a crowd followed their campaign train, especially in the North, he said “it got to a point I became afraid because of the over two million people (crowd) around us in Kano.”

    He reassured the electorate that in order not to be voted our of office as the PDP in 2019, “we will not disappoint voters in Jesus name.”

    On Wike, he said “may God not give me the kind of ambition of Nyesom Wike; he can sell anybody.”

    He said: “Let me tell you what is currently going on in Rivers State. The governor and PDP are afraid of me getting an appointment to the national executive council because that will determine what the politics of Rivers State will be.

    “And they know that the current President abhors corruption and the only way they can stop me from getting the appointment is to paint me with corruption. And the people that know me in Rivers State know that I don’t like money. But I am not angry with them. My anger is that in Rivers they know I don’t like money. And I expect them to defend me that I don’t like money.”

    The same Wike, according to Amaechi, who used to advise him that merely executing project without wasting money on people would not earn him a second term in office, has sponsored newspapers’ adverts to undermine his reputation.

    Amaechi added: “Governor Nyesom Wike has again sponsored one advert in a bid to undermine me. Only God knows that if there is one thing I don’t like, I don’t like money. Anybody close to me knows that I don’t like money. Even Nyesom Wike told me you will not win second term if you don’t use money. So all this wasted projects will not deliver us. And I said let us do it once and for all.”

    Those present at the reception were: Vice President Yemi Osinbajo, Aisha-Wife of President Muhammadu Buhari APC National Chairman, Chief John Odigie-Oyegun, Asiwaju Bola Ahmed Tinubu represented by Mr Dele Alake, Kaduna State Governor Malam Nasir el-Rufai, House Leader  Femi Gbajiabiamila, Plateau State Governor Simon Lalong, former Bayelsa State Governor Timipreye Silva, among others.

     

  • N2trillion expended on subsidy in 2012 alone

    N2trillion expended on subsidy in 2012 alone

    The Chief Executive Officer, Financial Derivatives, Lagos, Mr. Bismarck Rewane has revealed that the federal government had spent N2 trillion on subsidy overtime till 2012 for the importation of 12-15 million litres of petroleum.

    The naira, he said, is “technically undervalued” and one way to address this crisis is to “get rid of subsidy.”

    The country, he said, “must align spending with earnings and the right people should be put in place to execute this. If subsidies are not removed it will make the adjustment more painful.”

    The CBN, he said, has to be independent and autonomous, and if faced with difficult situations that go against the grains of sound monetary policy the honorable thing for the CBN governor to do if his advice is not accepted is to quit, because the policy environment has to be consistent.

  • The NNPC, missing funds and subsidy debacle

    These are certainly not the best of times for the Nigerian National Petroleum Corporation (NNPC). From allegations of non-remittance of oil revenue to those of operating above the laws of the land and constituting itself as a parallel government to the Federal Government, the anti-NNPC sentiments have come full-cycle and assumed the dimension of a mob action with the recent call by Governor Nasir El-Rufai of Kaduna State to “kill NNPC”.

    As is usually the case in every mob situation, objectivity and truth have been sacrificed even by those who have been given the assignment to investigate allegations of financial malfeasance against the Corporation by the National Economic Council. But try as we may to deny the reality of the financial situation that is upon our country by engaging in a mob action against NNPC or any other institutions or personalities, the truth is that the days of oil boom are over (at least for now) and the earlier Nigerians wake up to that reality with a view to taking responsibility to diversify the economy and develop alternative revenue sources for the country, the better for us all.

    It is a known fact that since the last quarter of 2014 the price of crude oil, the major export and revenue earner for the country, has been falling. From about $95 per barrel in September 2014, it dropped to about $85 (a difference of $10) in October that same year. This trend has been sustained over this period with the unfortunate consequence of dwindling oil revenue flow into the nation’s coffers for onward distribution to the Federal, states and local governments as has been the culture. But rather than look for creative ways of shoring up national revenues in the face of dwindling oil prices, all that we have seen so far is the demonization of the revenue generating agency for the oil sector, the NNPC.

    This is not a defense for the national oil corporation that has been hobbled by years of government interference and scandals. It is rather a call for a barefaced and critical look at the situation on ground with a view to averting the calamity the nation is certain to fall into if we choose to continue on the path of trading blames instead of rolling up our sleeves to work to build a prosperous nation. This work should include, of course, recovering every penny misappropriated by NNPC or any other institution or personality and meting out appropriate sanction on them to serve as deterrent. It should not be restricted to the NNPC.

    This is because, at the end of the day, it would be discovered that much of the so-called unremitted or missing oil revenue for which the Corporation is being pilloried emanated from the federal government policy of fuel subsidy which it has to implement. This much has been stated by NNPC in the past when it contended that it was erroneous for Nigerians to talk about missing oil money when it (NNPC) is saddled with the uneconomic task of bringing in kerosene and petrol at the cost of N100 and above per litre and selling at N50 and N87 per litre. The huge loss resulting from this is what is referred to as fuel subsidy. Ironically, while Nigerians, including the government, insist on having fuel subsidy, they turn around to label the cost of the subsidy as unremitted oil revenue or missing oil money and castigate NNPC for it. This was why a former Group Managing Director of the Corporation, Engr. Andrew Yakubu, once declared that if oil money was missing, then it got missing in the pockets of Nigerians who bought kerosene and petrol at less than the cost price.

    Other components of the unremitted or missing oil revenue, according to the explanations offered by NNPC, are the losses arising from crude oil and products theft and losses during the frequent cases of pipeline breaks. But to the Nigerian public, including those in government, it is convenient to charge these losses to NNPC insisting that they are unremitted revenue or missing funds.

    When the price of oil was high enough to guarantee a sizeable allocation to the various tiers of government, the huge losses were not noticeable or were rather overlooked. But with dwindling oil revenues on the back of falling oil prices, the losses have suddenly become very noticeable like a sore thumb. But rather than look at them dispassionately and think up ways of cutting the losses while at the same time creatively diversifying the economy to break away from dependence on oil revenue, all we have been treated to is the anger and fury of a mob.

    But mob action is not known to solve any problem, much less the gargantuan type that is starring us in the face. Now is the time for us to think and come up with solutions to the dwindling oil revenues and the mono-economy anchored on oil before our march on the road to Greece gets to an irreversible point.

     

    • By Usman Sanni, Abuja.