REMOVAL OF FUEL SUBSIDY: A DIALOGUE
by Deji Yesufu on Friday, December 16, 2011 at 12:31pm

ANTI: Jonathan, in his speech at the Carol Service at Aso Villa yesterday, digressed from the theme of the evening, by again bringing up the subsidy issue. He was nearly on his knees begging for the subsidy to be removed.



PRO: Begging is an exaggeration. Since it’s a pressing issue in the country, why should he not discuss it? He made it clear that the N1.4 trillion spent on capital projects this year was borrowed. The money saved from subsidy could be channeled into infrastructural development and then the country can stop borrowing.



ANTI: That premise is an indictment on the federal government. With all the money we make as a nation from oil we should never be borrowing. Government borrows to fund its excesses. What are all the egg-heads from the World Bank in his cabinet doing if they cannot plan and use the billions we make from oil without resorting to borrowing? Since the Obasanjo’s government, that rescued this country from an excruciating debt burden, left, Nigeria’s debt has been mounting. Now the country is swimming in a debt pool of $34 billion and still rising.



PRO: That exactly is what we are saying: subsidizing fuel will continue to plunge this country in debt. Look at the budget – 72% of it is to be spent on recurrent expenditure, because salaries must be paid. While a paltry 28% is meant for capital expenditure. Now if subsidy is removed the excess cash is what is meant for this capital projects. If not, the government will have to borrow to carry out its projects for 2012.



ANTI: My guy, don’t patronize me. Do you and Jonathan think we are kids? What is this nonsense of “if subsidy is removed”? Didn’t we see the 2012 budget? There is no provision for subsidy in it! Damn it, the subsidy has been removed!! So it is not a matter of “if…” All this talk from Jonathan and his cohorts is simply distracting and at best to supply some cushion effect on the masses when eventually the burden begin to tell on them. Let this government tell us it has no more ideas on how to deliver Nigeria from the myriad of problem bedeviling her and then simply resign like the Italian president did last month. Abi, na by force make person do president?!



PRO: Resorting to insults will not solve the problem. Our government has made it clear that if subsidy is not removed, our economy will collapse. Fuel subsidy removal will free up resources for infrastructural development. Yes, it will instill hardship on the people for say the first six months, but a deregulated economy will eventually bring the kind of competition we see in the telecommunication sector and by then fuel price will come down. Also private refineries will be able to function profitably and this will cause for there to be employment opportunities for the teeming unemployed youths in the country.



ANTI: Talk is cheap. The FG can talk all they like but Jonathan and his family will not feel the impending burden that subsidy removal will bring one bit since it is the state house that takes care of himself and his family like he told us on TV yesterday. There is such a thing as a political will and it must be said that the Jonathan’s government lacks the political will to solve Nigeria’s problem, except, of course, taking the easy route of subsidy removal. This government wants to implement a policy they know will inflict hardship on the people, yet it has refused to take actions to cut down on its own spending. Our government at all levels continue to go on trips abroad that cost the nation a fortune; like their last trip to Perth, Australia, for the CHOGM conference. One senator in Nigeria is paid better than the US president. The government has refused to introduce austerity measure in its circle but it is happy to implement draconian policies like subsidy removal. Again, if petroleum marketers are defrauding the nation, is there no way to curb them? This administration’s inability to deal with the menace of corruption in the oil sector is what has led to where we are today. Some say most of the marketers sponsored the president’s re-election, so he cannot deal with them. One can only conclude that Mr. President is weak and his moral failure in being corrupt himself robs him of the political will and moral integrity to fight corruption. Like Tunde Bakare said, it is not subsidy that should be removed but Jonathan and the PDP.



PRO: We are being unfair to Mr. President. He did not meet a particularly thriving economy when he became president. He is dealing with a 51 year rot in his hands and for me he is doing just fine. A government that desires to succeed should not be overly concerned with whether its policies are popular or not. Remember when the former CBN governor, Charles Soludo, proposed what came to be known as the “Soludo Solution” in 2004, where Banks were required to have a N25 billion investment base. Many kicked against that policy because it was unpopular. But the result dumbfounded many. Today Nigerian Banks are one of the strongest in Africa. When the economic meltdown hit in 2008, it was policies like that one that protected Nigerian banks from going under. The world is in the throes of yet another meltdown; if Nigeria does not deregulate the oil sector, we may be heading somewhere this country may never recover from.



ANTI: It is obvious to me that you, like the government you are advocating, would never bow to sound judgment. May it not be said in the annals of Nigerian history that Jonathan presided over the disintegration of the Nigerian state because of his obduracy.



PRO: President Goodluck Jonathan administration is a listening government. In the past this government has reversed it stands on issues because the people cried against them. Why do you think he will insists on this one despite it unpopularity? It is probably because he and his team are seeing something we all are not seeing yet. Fuel subsidy removal is the only antidote against an impending economic collapse in this country.



ANTI: He should have told us that during his campaign for re-election in April.