[size=14pt]Subsidy? Where Would the Savings Go?[/size]
Hassan Abubakar
14 December 2011

opinion

Now, one emerging character of President Goodluck Jonathan administration is its ability to remain focused even in the face of strenuous efforts at distraction by all sorts of self serving groups and individuals.

And there is unarguably no other policy of the administration that such groups have tried to earn political capital out of in recent times than the Jonathan's administration plan to complete the deregulation of the downstream sector of the petroleum industry.

I have observed, for example, how debates on deregulation have been reduced to the single item of removal or non-removal of subsidy either out of genuine ignorance or mischievously for the simple sake of appealing to popular sentiments. But in spite of such efforts at distraction, the Jonathan administration has kept its eyes on the ball, strategising on how the final deregulation of the downstream will not only helping the transformation of the economy, but will be beneficial to all Nigerians.

The key aspect of this is a very revealing document tagged Subsidy Reinvestment and Empowerment Programme that comprehensively and methodically addressed the concerns of some of us whose major arguments against deregulation have been government's failure to provide a roadmap on how savings to be made from the removal subsidy will be spent.

[b]For instance, the focus has been on how the Federal Government will spend extra revenue that will accrue to it from savings to be made from the removal of subsidy. But I pleasantly learnt from the Subsidy Reinvestment and Empowerment Programme document that it is actually the three tiers of government that will gain increased revenue as a result of the implementation of the policy.

At a projected price of $90 per barrel, it is estimated that the total projected subsidy savings per annum will be N1.3trillion. Federal Government's share of the savings will be N633billion, while states and local governments will receive N349 billion and N269 billion respectively as additional revenue annually.

The additional revenue that will accrue to the States and Local Governments will unarguably help assuage the crucial financials needs of the two tiers of government, especially in regard to the present difficulties they are having in meeting their social obligations.

I will therefore like the States and the LGAs to come up with plans on how they will spend their own portions of the savings. On its own part, the Federal Government succinctly in the document listed out a combination of programmes that will help stimulate the Nigerian economy and alleviate poverty through investments in critical infrastructure and safety net projects that it will spend its share of the savings on.

For example, the Federal Government indicated that the savings will facilitate additional investments in the power sector, roads, transportation, water and even, in the downstream petroleum sectors itself. These are sectors that are crucial to the transformation of the Nigerian economy and that can help nudge the country towards the achievements of the much talk about Vision 20:2020 objectives.

The savings will also lead to a reduction in the extent of borrowing needed by Federal Government to finance projects and meet its other statutory obligations. This will help address the problem of budget deficit, and will be in line calls to bring the nation's domestic debt, which over the years has grown to about N6 trillion under control in order to ensure a realistic economic growth.

The government also in the document addressed the concern of some of us on the likely impact of removal of subsidy on the vulnerable segment of our society with well articulated and well targeted safety net programmes, public works and employment schemes, maternal and child health, mass transit programmes and vocational training and skill acquisition schemes.[/b]

If well implemented, there is no doubt that these programmes will help in mitigation of the potential impact of the discontinuation of the subsidy regime on the underprivileged segment of our society.

There will be no acceptable excuse for shoddy or non implementation of the programmes contained in the Subsidy Reinvestment and Empowerment Programme anyway given the specificity of the document.

The document specifies savings that will be invested in the building of hydro and coal plants in the power sector to further enhance Nigeria's electricity generation capacity. The plants, their location and expected generation capacity were carefully itemised in the document.

[b]The counterpart funding for the construction of Mambilla hydro power project that will generate an additional 2,600 Megawatts of electric power, more than 50 per cent of total generation in the country at the moment is expected to be sourced from the savings.

Other 17 Small and medium hydroelectric power projects that will add a cumulative capacity of 140.275 MW to the national grid will also be completed with funds derived from savings made from removal of subsidy. The good news about the projects is that apart from providing rural electricity as a result of their locations, they will be isolated and embedded in a way that will help in the development of agriculture value chains.

The savings will also enable government to provide counterpart funding for public private partnership projects for development of Coal Power projects in Enugu, Benue, Kogi and Gombe. The coal projects have the potential of adding 1000 MWs to the national grid. So, how will the programme be monitored to ensure implementation? Federal Government itself has taken care of that in the programme also with a well articulated oversight, accountability and implementation structure at the apex of which will be a Board to be constituted by the President. The Board will be assisted by globally renowned consulting firms in carrying out its task of ensuring that government keeps its words on the expenditure of savings from the removal of subsidy. MDAs will also set up units that will monitor projects in their sectors.

But for me, the specificity of the document has even placed the monitoring in the hands of all Nigerians. So, I will advise that we all get the document, study it, familiarise ourselves with projects to be implemented with savings to be made from the subsidy removal programme in our respective communities and be ready to ensure that those projects are implemented.[/b] One thing that is sure is that with Subsidy Reinvestment and Empowerment Programme, the charge that government, especially at the federal level did not have plans on how to spend savings to be made from removal of subsidy or take care of the potential effects on the vulnerable segments of our society may no longer be tenable.

Abubakar wrote from Kaduna.

http://allafrica.com/stories/201112140283.html

There is nothing on ground to suggest that the so called savings from subsidy will not end up in the pockets of our thieving elites. Hassan Abubakar must be new to the entity called Nigerian or exceptionally naive.

[size=14pt]Zero-subsidy Regime And Electricity[/size]
Wed, 14/12/2011 - 5:24am | TONY EGBULEFU
Opinion



Government’s position on the propriety of fuel subsidy removal have been subjects of severe attacks from diverse quarters, some of them dripping ill will and malice.

These attacks, however, resonate with some paradox—a government that shows will and sincerity of purpose to make things happen, even when employing tough policies becomes an option should ordinarily earn commendations and not condemnation.

But what today comes as a knock-out punch on those whose only argument against the government’s proposed fuel subsidy removal is that it is anti-people, is the recent emergence of a codified articulation of government’s expenditure plan for the resources that would come its way in the post-subsidy era. The document, tagged: Subsidy Reinvestment and Empowerment Programme (SURE), captures in minute details, how the federal government plans to spend its share of N633 billion from the fund to be freed with the proposed zero-subsidy regime. And more good news is that the document well reflects a strong will and commitment of government to respect its words.

According to the document, the federal government would channel its own share of the resources into a combination of programmes to stimulate the economy and alleviate poverty through critical infrastructure and safety net projects, adding that cushioning the bite of the zero-subsidy regime is critical to the federal government.  Consequently, the document said, the negative impact of the policy would be mitigated through properly targeted safety net programmes including public works and employment schemes, maternal and child health, mass transit programmes and vocational training and skill acquisition schemes.

The experiences of some countries, that once found themselves in the same position with Nigeria today, are reassuring enough to the government that indeed, the edge would be taken off the zero-subsidy sting with an action plan that would dedicatedly give to the people what a subsidy regime could not offer. Examples from Indonesia, Iran and Brazil are sufficient in this direction.
The SURE programme document also provides for a transformation of the economy, in line with the vision 20: 2020 objectives, with critical infrastructure projects in the power, roads, transportation, water and downstream petroleum sectors.

For those in perpetual distrust of government, the document details a governance architecture that seeks to guarantee probity and accountability. The funds and its programmes are to be entrusted to the hands of a board, whose activities would be subject to a routine check-up by a reputable international auditing firm. The proposed board would be all-inclusive. It is saddled with a broad-spectrum of terms of reference to ensure that the goods are delivered.

Barring the broader inclusiveness of the board and the wider abuse checks, integrated in its operations, the board and its job descriptions mirror the upsides of the defunct Petroleum Task Fund, PTF. The board chairman would be an experienced person of excellent reputation and integrity. Other members  are a deputy chairman, six reputable individuals, one from each of the six geo-political zones and a representative of the civil society organisations; the labour union, Nigerian women groups; Nigerian youths; the Nigeria Union of Journalists, NUJ; a co-ordinating minister of Finance; minister of National Planning Commission; minister of Petroleum Resources; and minister of State for Health.

[b]For the needed transparency, the board in liaison with the ministry of Finance and ministry of Petroleum Resources would determine the subsidy savings estimates for each preceding month and ensure that such funds are transferred to the funds’ special account with the Central Bank of Nigeria, CBN. In the area of power, which has posed an intractable challenge to successive governments, and into which huge national resources have been sunk, the Jonathan government, has under the proposed zero-subsidy regime, laid out plans to further drive the power sector reforms by improving the generation capacity, not just through hydro, but with coal power plants. The SURE programme is also billed to make available, adequate counterpart funding for a fast-tracked construction of the stymied Mambilla hydro-power project, a colossal power plant which will generate an additional 2,600 megawatts of electric power. The SURE programme will also effectively provide funding that would lead to the completion of a total of 17 small and medium hydroelectric power projects, conceived by the Jonathan government with a cumulative capacity of 140.275 megawatts.

These small-scale power projects would be uniquely adapted to stimulate and sustain all year round agriculture, within the projects’ domains. As the SURE programme document states, “given the small size of these projects, they will be isolated and embedded in agricultural development economic corridors, which will contribute to enhancing the agricultural value chains for increased production, in line with the transformation agenda.”
Also remarkable is the fact that the 17 small and medium scale power plants are conceived with an eye on quick wins—they would require a short turn-around time by their brief nature-such that they can be delivered in good time within the first three years of the SURE programme.[/b]

The idea behind this accelerated approach is rooted in the president’s desire to leave a remarkable difference in the power situation of the country. The SURE programme is also billed to provide counterpart funding for Public Private Partnerships, (PPPs) for the development of coal power projects in Enugu, Benue, Kogi and Gombe states, all of which are reckoned to have a cumulative potential of generating 1000 megawatts of power.

If these projects come on stream, they would substantially lead us the path of the power sufficiency that is required to rejuvenate the nation’s economy and inch it closer to attainment of the goals of vision 20: 2020. But this would, however, come with a catch-our collective willingness to give room for change.

—Egbulefu is an Abuja-based policy analyst

http://www.leadership.ng/nga/columns/10486/2011/12/14/zero-subsidy_regime_and_electricity.html

[size=14pt]Fresh Air![/size]

to hell with this writer, poster and surpporters of this fuel subsidy removal.
what nonsense documents? how far with the much talked about road map? what happened to the emergency daclared on the electricity sector?
why didn't jonathan tell nigerians during his campeign days that he was coming to remove fuel subsidy so that we will vote him for that?
let the dream die because we can't manage the hardship this removal will bring upon our lives.

@beaf,
u mentioned ibb building a refinery in ivory coast. you also mentioned abacha building one in benin republic. we also heard that alamesieya built his in sao tome so why can't saint goodluck ebele azikiwe patience jonathan build us one or two?
if our first lady decides to be free with her hands, she can give us the gifts of refineries because we all know her stories in line with money laundry even while she was a first lady in bayelsa state.
do not be decieved but be rest assured he will not succeed.

The fast tracking of the Mambilla project that will supply a whopping 2,600MW and take us closer to 8,000MW is very good news.
Little by little, we be inches forwardly!

Nice one GEJ! There is also, "small-scale power projects would be uniquely adapted to stimulate and sustain all year round agriculture." It is hard to quantify the employment benefits such a system would bring. It would project Nigeria right slam on the high-tech agricultural scene, that along with our satellites in space to provide accurate weather and season forcasts for agriculture.

I am almost dancing with happiness!

It will simply go into the pocket of our so called co-r-rupt leaders and their cronies like beaf.

Batam:

It will simply go into the pocket of our so called co-r-rupt leaders and their cronies like beaf.

Another micro-mind on parade!

Power and improved infrastructures (ROADS and RAILS). There are so many line items on that budget that needs scrapped off and/or reduced.

LOOKS LIKE BEAF IS ON HIS PERIOD!!!!

The dirty clot!

Hmmn! I hope they do d right thing wt d money.

BEAF carry your campaign away. To blazes with your analysis. Who cares if you are on the payroll of the snail and backward thinking man.

Am so tired of all this stories. So much document and memorandum with nothing to show for it. D 'savings' will simply increase the fund available for looting by our politicians. D money is trickling down to all tiers of govt, so what happens to that local govt chairman in kafanchan where no one is there to monitor his expenditures? This is the main reason d people are kicking against this bill-it will simply impoverish the people more.

Fuel Subsidy will end up in the pockets of some silly politicians who only think of buying huge mansions abroad, sending their kids to foreign universities, buying huge SUVs to reduce the effect of bad roads and generally doing nothing to help the average Nigerian.

Nigerians are too docile, we need to wake up!!

JamesDoe:

LOOKS LIKE BEAF IS ON HIS PERIOD!!!!

The dirty clot!

WHOA!!! now that is mean!   ,

Beaf,
Do you obviously think that people are that daft, they say once bitten twice shy! Let me see how you keep on deceiving your gullible followers on NL after convincing them that retardeen was their messiah.

Beef: very supportive of GEJ. Maybe he will also die with GEJ.

Let's see whether Nigeria will still stands with corrupt GEJ afterward

Beaf and Ruben Abati, who worse pass?

Obviously everyone have seen we voted in a retardeed president

Just keep enjoying your fresh air

chris aire's brother
extra pay package for reps
police fund for kenny martins successor

same thing that  happened to the savings under obj's watch
same thing that happened to gulf oil windfall under ibb's watch


gej , a man who has an unbroken track record of incompetence, deceit and empty promises and high faluting stories

abegi!!

i wish the poor suckers who voted him in the best. we are all about to get poorer.

Idiotic beaf!! to hell with u and ur boss.U need to be castrated so as to stop u from posting rubbish on NL.Fresh air my foot.

i suggest beaf and his master spit their bs up another tree. bloody lying animals


http://www.internationalrivers.org/africa/mambilla-dam-nigeria

The 2,600 MW Mambilla Plateau Hydropower Project has been called Nigeria's Three Gorges Project. If built, it would have the largest capacity of any dam in Africa, and it would be one of the most costly (US$1billion). Those financing and constructing the dam include the China Exim Bank, its main funder, China Geo-engineering Corporation, and China Gezhouba Group Corporation.

Like many projects in Nigeria, Mambilla Dam has been engulfed in controversy over the corruption exercised by Nigeria's previous president. For instance, while a contract has been awarded to Gezhouba, the main builder of the Three Gorges Dam, no work has yet begun at the project site, besides a project inauguration ceremony. When Mambilla was first proposed, the German engineering company Lahmeyer got a contract to carry out a feasibility study in April 2005. Since then, Lahmeyer has been blacklisted by the World Bank, after being convicted of bribery in the Lesotho Highlands Water Project in 2003. Lahmeyer was supposed to carry out its Mambilla contract within 15 months, but while it collected US$3.2 million, no work occurred on-the-ground.

Many fear that Mambilla will go the way of previous large development projects (including large hydropower projects) where contracts are meted out but projects are never built. Instead, corporations and politicians pocket the money, and local communities receive few benefits. Ongoing parliamentary investigations in Nigeria have brought up many such cases, among them the Kainji and Mambilla hydropower projects. If the Mambilla dam project does continue, it could mean disastrous environmental and social impacts for those already living in poverty along the banks of the Benue River.

International Rivers continues to support local groups in their efforts to confront Chinese companies that are involved in dam projects in Nigeria. To read more about Nigeria's water corruption scandal, visit Peter Bosshard's blog.

http://www.nigeriafirst.org/article_10049.shtml

Power, Oil & Gas
Completion of Mambilla hydro power plant to be prioritized
Jul 13, 2010, 14:43


Vice President Namadi Sambo at a meeting with the Presidential Committee on the Mambilla Power project and the consultants, on Monday July 12, instructed that the 2600 megawatts Mambilla hydro power project, located in Gembu, Taraba State, be completed immediately.

Vice President Sambo who also directed that a revised programme, including the feasibility study of the Mambilla dams, be completed in a fortnight, noted that government could not have done anything less, against the backdrop of external funding to bolster power generation in the country.

“This administration has resolved to look into the area of power generation and the key areas of concentration are hydro power and coal power production” He maintained.

According to him the Africa Development Bank (ADB) and the Islamic Development Bank (IDB) had each offered to provide $3 billion and $2 billion respectively to fund power generation in the country.

Identifying the challenges militating against the completion of the Mambilla hydro electricity project, Vice President Sambo listed “geo-technical, geo-physical orthophoto-mapping, accessibility, environmental impact assessment problems, legal issues as well as lack of payment to various contactors handling the project”.

He therefore promised to provide helicopter to ease the problems of accessibility, orthophoto mapping, geo-technical and geodetic surveys, among others.

The Vice President also noted that it was in the bid to speedily resolve these problems that he set up a committee comprising Ministries of Power and Justice, Special Adviser to the President on Power, Prof. Barth Nnaji and a representative of his (Vice President) office.

In his earlier presentation, the Minister of State for Power, Nuhu Wya, disclosed that the current consultant to the project was Coyne Et Bellier.

He listed some of the major constraints militating against the completion of the project to include non completion of field studies and investigation of schedule, difficult access and weather conditions as well as non-definition of implementation mode since the cancellation of the civil works contract.

The Minister urged the Federal Government to continue with the project under the present implementation plan.

© Copyright 2011 nigeriafirst.org

What happens to the money? it should be channelled to building 10 new blco refineries across nigeria

but as usuall pdp is already waiting for that money any attempt to prevent I CANT SHOUT

this beaf guy na nincompoop, including every Nigerians that voted for GEJ, the guy as got no good history yet they voted for him because of sentiments and the slogan ("i didnt have shoes campaign" Nigerians and sentiments;

The idea sounds great on paper in a country where public officials are held accountable.

The way I see it, the only thing guaranteed is that the citizenry will see inflation and their purchasing power will be reduced. GEJ’s plan, as laid out by BEAF, is for the government to take money/benefits that accrue directly to the citizenry and hand it over to the government with hope that they do the right thing?

What are the Federal, State, and Local governments currently doing with their allocation? What makes anyone think that they will suddenly have a change of heart and channel the funds to the much needed infrastructure?

What happened to the funds (about $35Billion) GEJ released to the States before the primaries?

I’m all for fuel subsidy removal but only if the citizenry will see the benefits. GEJ needs to fire his advisors and hire new ones because he’s in need of sound ideas and he appears not to be getting any!

The government also in the document addressed the concern of some of us on the likely impact of removal of subsidy on the vulnerable segment of our society with well articulated and well targeted safety net programmes, public works and employment schemes, maternal and child health, mass transit programmes and vocational training and skill acquisition schemes.

if these are the so called pallative measures they i wonder why i pay tax or rather what my tax is used for?

Wallie:

The idea sounds great on paper in a country where public officials are held accountable.

The way I see it, the only thing guaranteed is that the citizenry will see inflation and their purchasing power will be reduced. GEJ’s plan, as laid out by BEAF, is for the government to take money/benefits that accrue directly to the citizenry and hand it over to the government with hope that they do the right thing?

What are the Federal, State, and Local governments currently doing with their allocation? What makes anyone think that they will suddenly have a change of heart and channel the funds to the much needed infrastructure?

What happened to the funds (about $35Billion) GEJ released to the States before the primaries?

I’m all for fuel subsidy removal but only if the citizenry will see the benefits. GEJ needs to fire his advisors and hire new ones because he’s in need of sound ideas and he appears not to be getting any!

That is what we have been asking beaf to explain to us since ooh

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[b]My questions to beaf and the fictitious writers he profusely quoted

1. The so-called 'SURE' Board, under what law will it operate? If it is not set-up by the Act of parliament, no fund can be appropriated for it and it cannot spend. So the President will still need the National assembly support contrary to what his aides said. There cannot be any appropriation for it in 2012 again because all revenue expected have been budgeted.

2.Where is the money going to come from?  Since no specific mention was made of subsidy savings in the budget, then it means all the revenue expected has already been factored in and all budgeted expenditure also stated which is even higher than the expected revenue (thus the deficit). So where is the money to be spent by the SURE? Fuel subsidy expenditure has simply been removed from the budget, so subsidy has been removed effectively next year except the legislature insert it and thus jerk up the deficit.
Note that the extra pump price to be paid by the public is not payable to goverment but to the marketers.

3. In 2004/2006, when Nigeria debts were partly forgiven, better document was prepared and purportedly endorsed by the creditor-nations and world bank on how the debt relief fund will be used for the masses. Where is the fund today? Or is Nigeria still not suppossed to be benefiting from not servicing the debt anymore?[/b]

"BEAF" nairaland star!!! you are beginning to annoy me. Always bias in all your comments, Remember children unborn. PDP are mitigating a lot of things in this country. BEAF!!! Wake up, we need you to lead a revolution.
WAR

@ beaf hope u heard the national grade just dropped another 1200 mega watts due to the shut down of egbin, stupid govt, stupid agenda,