Vanguard (Lagos)

16 July 2014

Nigeria: Subsidy Must Go - Finance Commissioners, NECA

Commissioners for Finance from the 36 states of the federation rose from their monthly Federation Accounts Allocation Committee, FAAC, meeting in Abuja, yesterday, insisting that petroleum products subsidy must be removed.

While their position was consistent with that of the Nigerian National Petroleum Corporation, NNPC, it sharply contradicted the thinking of the Nigerian Senate, which held a few days ago that petroleum subsidy should remain.

The commissioners had, three months ago, decided that the current subsidy was not in the interest of the nation and wrote a letter to President Goodluck Jonathan, demanding an end to it.

The Chairman, Forum of Commissioners of Finance, Mr. Timothy Odaah, told journalists shortly after the meeting that there was no going back on their position and that they had fully briefed their principals-- state governors.

According to him, the administration of the subsidy had been characterised by massive fraud by oil companies whom he said had been paid several billions of Naira for nothing and argued that the purpose for the subsidy regime had been defeated.

He said: "The issue of subsidy removal re echoed today (yesterday) and it became an issue of discussion and the report of the committee set up three months ago is being awaited and we still stand on the removal of subsidy as it will be of much benefit to the states, because what we have now is like robbing Peter to pay Paul.

"The purpose for which government set up subsidy is being defeated and so it should be based on consumption."

The Group Managing Director of the NNPC, Engr. Andrew Yakubu, had at the weekend told newsmen that only the removal of subsidy from petroleum products would attract investors to the downstream sub sector of the industry.

He argued that subsidy was creating distortion that scare away investors.

NECA, NLC trade words over fuel subsidy

Meanwhile, Nigeria Employers' Consultative Association, NECA, and Nigeria Labour Congress, NLC, yesterday in Lagos traded words over the continued sustainability of fuel subsidy in the country.

At its 57th annual general meeting, while NECA argued that subsidy was not sustaina-ble in the long term and was not sufficient and effective for the overall development of the Nigerian economy, NLC insisted that it was sustainable and would help Nigerians to cope with current harsh economic realities.

Speaking through its President, Chief R. U. Uche, NECA said: "While we acknowledge the fact that it might not be politically expedient in an election year for the government to fully deregulate and privatise the downstream sector of the oil and gas industry, the truth remains that it is not economically justifiable for Nigeria to continue to depend on fuel importation.

"The current policy of fuel subsidy portends grave danger for the future health of our economy. It is certainly not sustainable in the long term, neither is it sufficient and effective for the overall development of the Nigerian economy."

Disagreeing with NECA position, NLC, through its President, Mr. Abduwaheed Omar, noted that Nigeria had no business importing petroleum products, lamenting that the problem had been government's lack of the political will to ensure products were refined locally.

Omar contended that subsidy was being used by government officials to deceive Nigerians that about N1.3 trillion was being spent annually for subsidy.

He said: "It is not correct to say that in 2010, 2011, 2012, 2013 and 2014, about N1. 3 trillion was spent annually for subsidy. What is provided for in the budget is N260 billion.

"We believe that it is not too much for government to spend for Nigerians to benefit from God given resources.

"Therefore, subsidy is sustainable. What is not sustainable is corruption.

"We should all join hands to fight the corruption therein. With the level of poverty in the country, the Nigerian people need the subsidy and it is sustainable."

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