What changes are you expecting from the new Finance Minister?

You first, what are your expectations?

I expect her to re align our economic system to fit our current developmental needs. Place more focus on capital investments and less on our over bloated recurrent expenditure. More importantly, introduce policies that will encourage local manufacturing, FDI and regional economic integration. I also expect her (and the economic team) to consolidate on Sanusi's efforts at "saving" the naira.
Certain tough decisions will have to be made if we really want changes. I personally do not see the need to continue subsidizing our imported petroleum products. Oh yes! Tough talk right? Reason is the resources expended on subsidies could have been put to better use such as creating investments that will benefit Nigerians and the economy better. We lose much more with the current system because a huge chunk of our subsidized products find their way into neighboring countries. Effectively, we subsidize not only what Nigerians need but also what our neighbors need! Furthermore, removal of subsidies will force Nigerians to go for better energy efficient systems. This can help reduce our energy demand in a way. That in turn will yield environmental benefits. However, for this to work effectively, the issue of power has to be tackled head-on. We also have to improve refining capacity such that we become a net petroleum product exporting nation rather than an importer.

The Nigerian economy is a challenging and interesting one. I hope Okonjo-Iweala and her new team deliver the goods.

I expect her to keep the promises she made --- no one FORCE am make am the first time around -- that she is making the same set of promises this time around, leads me to believe it is probably best we hold her to it this time so we do not have to have her come back a third time to start this all over again.

Just to buttress my point on removal of subsidies, check out this news.

[Quote]Cameroon fuel truck explosion kills 15
Monday, July 4th, 2011

Nigeria's cheap, subsidised fuel known as "zoua-zoua"; can fetch three times the price in Cameroon

YAOUNDE, Jul (Reuters) - Fifteen people were killed when a vehicle carrying smuggled fuel from Nigeria into Cameroon exploded at a border village, state radio reported on Monday.

All the dead were Cameroonian apart from one Nigerian. The report did not say what caused the blast in the Benue division of Cameroon's North region, but local government sources told Reuters a passenger on the vehicle had lit a cigarette.

Authorities say such incidents are common in Cameroon's three northern regions of Adamawa, North and Far North, because Nigeria's cheap, subsidised fuel known locally as "zoua-zoua" or "funge" can fetch three times the price in Cameroon than it is sold for in its West African neighbour.

Security forces succeeded in eliminating the illicit trade in petrol between Cameroon and Nigeria in English-speaking South-West and North-West regions in the mid-1990s, but failed in the northern part of the country because of porous borders.

At least 230 people were killed when a fuel tanker overturned and exploded in eastern Democratic Republic of Congo a year ago.
© Thomson Reuters 2011 [/Quote]

Source: http://www.cameroononline.org/2011/07/04/cameroon-fuel-truck-explosion-kills-15/

The cameroonians are not dead yet even as their fuel price could be about 3 times ours! Why waste our money "father christmassing" for the "whole world" when we can channel this money somewhere else more effective.

Fuel subsidy is a classical example of giving someone fish rather than teaching the person how to fish.

My personal opinion on fuel subsidy is that they should NOT remove it. It is the only benefit we receive from govt. Once, they lift it, there will be more money to be stolen by the politicians. They won't use even half of it 2 benefit us.

I also expect madam to increase fiscal expenditure to the area of agriculture, housing development and small and medium scale business. These areas seem to have been neglected over time through over dependence in oil and imported materials. Providing adequate funding for these areas will speed their contribution to overall development of the nation, both in terms of job creation, income and wealth generation. I see Nigeria as the African food hub. We only need to pay attention to agriculture, especially large scale farming.

Also, madam should ensure that proper monitoring and evaluation activities are put in place to ensure that funds are put in proper use and for the purpose for which they are disbursed, in the right time and in the proper form.

Microfinance institutions parntering co-operatives/ groups, especially women across the 774 local govts in nigeria.

There is a need to revisit the earlier grandiose microfinance framework. It must have been written inside nicon hilton hotel by some big suit mofos, there is a need to close the gap of the rich and the poor. poverty rate taken to say 25% by 2015, it is achievable. Grassroot minded microfinance is the way forward.

Talking about removal of petroleum subsidies, that should be her no 1 priorities. If u understand what is happening in the downstream sector, no one will hesitate to call for its removal. A situation where a ship load of PMS berths, quantified, subsidy claimed, then with collaboration of PPRA, NPA and sometimes NAVY, the terminal owner backloads the products, take it back to the sea, latter bring it back as fresh product and claim yet another subsidy, then back loads again and maybe go and sell to Equatorial Guinea, Cameroun etc @ international prices, often x3 of susidised pump prize, the cycle continues. We are talking about billions of Naira in each of this cycle, since these ships carry at least upward of 20 million litres. The whole system stinks. I know because I work as pet Inspector in the industry.

cut sanusi's wings

asoderock:

Talking about removal of petroleum subsidies, that should be her no 1 priorities. If u understand what is happening in the downstream sector, no one will hesitate to call for its removal. A situation where a ship load of PMS berths, quantified, subsidy claimed, then with collaboration of PPRA, NPA and sometimes NAVY, the terminal owner backloads the products, take it back to the sea, latter bring it back as fresh product and claim yet another subsidy, then back loads again and maybe go and sell to Equatorial Guinea, Cameroun etc @ international prices, often x3 of susidised pump prize, the cycle continues. We are talking about billions of Naira in each of this cycle, since these ships carry at least upward of 20 million litres. The whole system stinks. I know because I work as pet Inspector in the industry.

Not a good enough reason for us to start paying more for fuel, the govt steals our money already, this is the ONLY thing they providing for average Nigerians, if they remove the subsidy life will be impossible, everything will skyrocket, even the Naira will devalue. What they can do is to fix the security,

Na wa o, Na MINISTER she be o (just one at that) she can only do so much, besides some people's wishes here are for areas over which she has little or no authority. She can do much but lets temper our expectations.

emiye:

Microfinance institutions parntering co-operatives/ groups, especially women across the 774 local govts in nigeria.

There is a need to revisit the earlier grandiose microfinance framework. It must have been written inside nicon hilton hotel by some big suit mofos, there is a need to close the gap of the rich and the poor. poverty rate taken to say 25% by 2015, it is achievable. Grassroot minded microfinance is the way forward.

Have u read the framework sir? please what is "grandiose" about it?

Pls can someone explain in details to me about recurrent and capital expenditure,

NOTHING as far as GEJ and his cohorts of siddon look are doing what they know best- siddon look while the treasury is being looted point blank

Ok, Ngozi is now the president of Nigeria and we all expect her to fix the country. GEJ can now go and sleep.

Nothing really,
the underlying foundations necessary for her to create something substantial do not exist,
I can mention many but here are 2,
The political structure of the country is still very wrong, it encourages lazyness at all levels,

And secondly, the industrilization necessary to start creating jobs, creating depth in the economy is still quite far off,

If you put the two resons together, you find out that we are not productive right now, hence it will be difficult to forge any resonable economic targets for now,

The best she and GEJ can do for no is to steer 9ja to a position primed for poductivity, tear down all the laws encouraging lazyness via bills or constitional amendments

odedele:

cut sanusi's wings

she will do everything good

now finally, someone to put sanusi where he belongs!

I will advise her to create more legal entities that would rule/ regulate the banking sector of the economy, this legal body will see to the day-to- day transactions of the bank, that would reduce unnecessary money- laundry, incomes should be verified by the banks too, to avoid "illegal banking" by some individual, failure for any bank to comply with the regulations will result to fines and prosecution, ( by so doing, new jobs will be created for some).

not to take advice from world bank and IMF, those institutions have no good plans for Nigeria.

asoderock:

Talking about removal of petroleum subsidies, that should be her no 1 priorities. If u understand what is happening in the downstream sector, no one will hesitate to call for its removal. A situation where a ship load of PMS berths, quantified, subsidy claimed, then with collaboration of PPRA, NPA and sometimes NAVY, the terminal owner backloads the products, take it back to the sea, latter bring it back as fresh product and claim yet another subsidy, then back loads again and maybe go and sell to Equatorial Guinea, Cameroun etc @ international prices, often x3 of susidised pump prize, the cycle continues. We are talking about billions of Naira in each of this cycle, since these ships carry at least upward of 20 million litres. The whole system stinks. I know because I work as pet Inspector in the industry.

Well its unfortunate that Nigerians can sabotage the economy that way but still not a good reason to remove fuel subsidy. In a sound and corrupt free country no one would have expected such mess of importing fuel when we have more than enough. At the moment it seems to be the only national cake that benefits 150million of us- as soon as subsidy is gone, you will see the price of things will reach the roof and their will be wahala in the land.

Any one here clamouring for a removal of fuel subsidies has it dangerously wrong!!!! Why? Simple.

1. A removal of fuel subsidy will throw millions of Nigerians into poverty overnight.

2. A removal of fuel subsidy will throw many businesses into administration overnight.

3. A removal of fuel subsidy will make millions unemployed overnight.

Elaboration: Fuel subsidy ensures the average Nigerian is able to access goods and services at reasonably(ish) affordable prices.

                   Fuel subsidies are important to help neutralise wealth inequality with bigger economies because imported fuel is traded at international
                   bench mark prices. I bought fuel in South London a couple of weeks ago @ £1.70 a litre that same litre i bought in Abuja @ N65 a litre.  
                   Incase  you are wondering the black market exchange rate is N272 to a £1.
                   So if your fuel is not subsidised and you purchase at the international retail rate you'll be paying upwards of N400 a litre.

Significance: An absence of subsidies means a significant increase of prices from a loaf of bread,to a bus ride. In simple terms life will get real hard!!!

Krucifax:

Any one here clamouring for a removal of fuel subsidies has it dangerously wrong!!!! Why? Simple.

1. A removal of fuel subsidy will throw millions of Nigerians into poverty overnight.

2. A removal of fuel subsidy will throw many businesses into administration overnight.

3. A removal of fuel subsidy will make millions unemployed overnight.

Elaboration: Fuel subsidy ensures the average Nigerian is able to access goods and services at reasonably(ish) affordable prices.

                   Fuel subsidies are important to help neutralise wealth inequality with bigger economies because imported fuel is traded at international
                   bench mark prices. I bought fuel in South London a couple of weeks ago @ £1.70 a litre that same litre i bought in Abuja @ N65 a litre.  
                   Incase  you are wondering the black market exchange rate is N272 to a £1.
                   So if your fuel is not subsidised and you purchase at the international retail rate you'll be paying upwards of N400 a litre.

Significance: An absence of subsidies means a significant increase of prices from a loaf of bread,to a bus ride. In simple terms life will get real hard!!!

I disagree with your conclusion and i think your analysis is overly exaggerated.

Removal of subsidies will not throw millions of Nigeria into poverty, it will not mess up people's business as being speculated and it definitely will not render millions unemployed.

First of all; if fuel was deregulated today, the price will come down to about approximately N144.70. This is based on expected landing cost (per platts), and 10% profit margin for those marketing the product. So based your calculation, basis of N400/litre is way too much.

I agree that pump price will increase in the short term, which might also spike up inflation. But, that's just it. Transportation cost from point A to B will increase because of this effect, which might ripple down to food, labor, and other economic factors. I don't think people will quit their job because transportation cost increased from N120 to N150. I don't think they're going to starve to death because of this reason as well, it'll just make people better planner. If people are not losing their job because of high cost of Automotive Gas Oil (AGO), Low Pour Fuel Oil (LPFO), then they're not going to loose their job over high cost of PMS. Therefore, the speculative fore of throwing people into massive poverty will not happen.     

Majority of the manufacturers that operates in Nigeria utilizes AGO, HHK, LPFO not PMS for their daily operations. These products are not being subsidies in any way. These companies are still operating; they're not laying people off, they are still hiring, expanding, in face of high cost of operation. Our speculation of deregulation forcing massive layoffs is grossly over-hyped and overstated.

I am optimistic that deregulating downstream will not kill our economy, it can only rejuvenate it. I believe that if we deregulate the sector, below are some of the results that can materialize from such speculation.

1. We can save all these subsidies, and channel them into other productive area of the economy which will give higher ROI in comparison to what we currently get under status quo.
2. Under deregulation, companies will have economics and other incentives to justify downstream investment which will create massive jobs for the people.
3. With downstream investment in place; it will afford us the opportunity to refine our own crude oil for local consumption, export and contribute greatly to our GDP.
4. With downstream investments, this will contribute to both state and national tax revenue.
5. With downstream investment in place, we can produce other products that can spike up other industry which will boost jobs, tax revenue, and boost our economy.

Let us not be myopic in our thinking and continue to allow instant gratification to cloud our judgment. There is no growth without pain, and we have to be ready to make that sacrifice to enable us tease out those benefits. Deregulation is a necessary sacrifice we must make, if we want out economy to get out of its slump. Our leaders must have the discipline to see this deregulation from an objective stand point, and educate people on its benefit so that our economy can progress rather than playing with our collective intelligence.

zilch

Its only ppl who hv little or no knowledge of Economics that call for removal of subsidy on petroleum products.
If we want to witness vortex of upheavals try removing it
Labour will definitely react vigorously
If its ever done the much talked about N18,000 new minimum wage will be rubbished & more agitations will ensure
Inflation will surely gallop
Many people will go begging & more mad people will emerge

The only gain is for the looter politicians, they will have more money to steal
Of course armed robbery will escalate, Yea bc man must survive
Most ppl who engage in robbery do so 2 eke out living
Kidnapping will boom, & this time our politicians will be more targrted
I believe GEJ will not buy into d idea even if our best brains advise for that

I blv there are various ways to get out of the wood we hv found ourselves
Remove the bad boy @ CBN, provide power, improve infrastructure, make our education more functional etc
Activate all these & expect employment opportunities
If you wish 2 dig further revitalise our refineries, create more refineries & see that there are no encumbrances

wow!economist,criminologist ,sociologist and psychiatrist.

king solomon

Nothing, just the same old politics they play with us

mrjingles:

Na wa o, Na MINISTER she be o (just one at that) she can only do so much, besides some people's wishes here are for areas over which she has little or no authority. She can do much but lets temper our expectations.Have u read the framework sir? please what is "grandiose" about it?

Microfinance should be focused on the roadside groundnut seller, the poorest of the poor. , there collateral must be peer pressure. , that is why focus should be on groups e.g 6 groundnut sellers. It should be micro in the real sense of it. Current microfinance institutions are competing with commercial banks, and commercially oriented. Microfinance should be more of a social package;"Not for profit"--- profit just for sustainability. Bangladesh has a success story. Ministry of finance and CBN needs to work out a more practical MFI.

@ Courage89

I see that u have a lot of valid points about deregulation but try selling that to Labour union in Nigeria and you will have a general/complete SHUT DOWN of the work force vis-a vis economy.

Let us not be carried way too off. The Nigerian society is not that ripe. Yes, we have intellectuals but whats the ratio to those that are not enlightened. You may have traveled wide and seen different cultures and life styles, but how many have had that oppurtunity. You may have a good job and life a very comfortable or relatively comfortable live, but have ever wondered how many of those faces we see everyday on the road can confidently afford a three square meal.

As somebody rightly said, fuel subsidy is the only gain the poor masses have from our economy. I agree that its not helping the economy right now but removing it won't be the answer. We need to tackle corruption and mis-management first head-on. Kill the hydra-headed monster, rid the government, esp NNPC, DPR and its associates of inept and lazy workers, get our agriculture in good stead, fix power and generally improve the living conditions of the masses, then we can start talking about de-regulation and removal of fuel subsidy, This is my take on this.