₦airaland Forum

manny4life:
1). How can we agree to these as "FACTS"? We don't have working statistics to prove this "FACTS" or do you?

The facts are well established.

Isn't it rather unlikely that fuel will stay under N300 billion meanwhile waste as well as consumption has doubled?

The evidence does not incline towards any significant increase in terms of consumption. Certainly not an increase that can explain a situation whereby the subsidy is funded under 300 billion per year for over ten years, and then in ONE YEAR ONLY, it is claimed that the cost increased by 1 trillion naira to 1.3 trillion.

That is an insulting statistic: it bespeaks fraud of the highest order - and certainly proves the point that normal increase in consumption is NOT at play here.

2). How do you mean 300 Billion will not suffice for the development speaks of?

What i mean is that the government parrots the removal of the subsidy as a step that will release critical funds for development. It premises this argument on the fraudulent cost of subsidy at 1.3 trillion - which magical figure only appeared in the last one year - rising from under 300 billion per year only. The point here is that if the cost is held at its true level - less than 300 billion - this is not a sum that the government can argue will save Nigeria's infrastructure deficit because -

1. That sum represents only about 7 - 8 per cent of the budget. That per cent is not going to bridge the gap of the infrastructure deficit. 

2.  Considering the critical role payed by the subsidy in the economy both as a welfare item and as a buffer against rippled infalation in the cost of living, 7 - 8 per cent of the budget is not an improper investment in the subsidy.

3. The subsidy came about on account of an import regime that arose from the incompetence of the government. The government thus cannot shirk it as a responsibility that arose from its own failure with regard to the refineries.

4. The government indeed expends greater percentages on far less important items: one such example is the legislators salaries.

5. Greater sums (an example of which i will give below) have been provided sevrally by the government year in year out: with zero results.

Did the govt tell you that subsidy money was the ONLY money to be used developments? Like seriously?

But of course since the argument is about removing the subsidy to facilitate development, we must naturally consider to what extent such funds can do so.

I believe the govt argument all this while has been, subsidy money will go into developmental/infrastructural projects for better life improvement.

Let me remind you that in a particular year alone, the government of Olusegun Obasanjo dedicated 300 billion to the Ministry of Works for roads. The entire sum disappeared. It is thus a hard sell to argue that the removal of subsidy is what is now required only to provide the exact same sum of money for supposed infrastructure again. Far greater amounts have been made available for infrastructure. What became of them? This thus shows that -

- The government does not need to remove the subsidy to make such sums available and

- Where such sums have been available, they have invariably disappeared

BTW, almost $2billion (i.e. if it's not more) is more than enough to construct brand new rails, bridges, hospitals, rehabilitate education institutions and the list goes on.

If that were the case, then all those amenities would exist perfectly completed already - because Nigeria can afford that sum over and over and over and over again, yes sir.

The bottom line is that the people DO NOT trust the government

True

NOT THAT the money saved from it is not tangible,

Not tangible enough for the sort of National across-board infrastructure being envisioned and advertised.

3). Dude, more than $2billion (i.e.if its not more than) cannot bankrupt the government?

No it cannot. The bankruptcy argument is an insulting and nefarious lie.

With or without the GOVT WASTE, budgeting almost 1/10th of one single line expense out of hundreds of line items in a budget is NOT sustainable to a govt seeking aggressive development.

If the line-item is critical enough, 10 per cent of the budget is not beyond borders. Other line items regularly consume more, believe me. Secondly you may recall that this expense came about on account of the negligence of the government itself.

Finally let me also remind you that the Olusegun Obasanjo government paid off Nigeria's over 30 billion USD debt (under a buy-back at about 18 billion USD) - WHILE STILL PAYING THE FUEL SUBSIDY - under an oil price regime not significantly different from today's.

What gives bro?

^ Yes of course, so let'as throw that in straight away.

Simplified Argument No 6

POINT: THE Subsidy is dwarfed by the outrageously corrupt cost of government

It is well known that the our legislators are the highest paid IN THE WORLD. The cost of the remuneration for the National Assembly alone is over 1 Tr.

Given that the real cost of the subsidy is <300 billion, it follows that the cost of this subsidy (barring the ridiculous quadrupulation of last year alone) is aout 25% ONLY of the cost of paying and maintaining our legislooters.

This alone indicates that the problem is by no means the subsidy, but the shamefully overbloated cost of corrupt governance.

People have drawn the analogy that 1 trillion can be spent on less than 500 legislators, but like sum for 160 million people is reprehensible in the eyes of the government. This is apt: but not even clear enough. To be clear, we need to additionally note that -

1. The real sum is NOT 1 Trillion but only about 25% of that - as proven by prior budgets

2. It also goes beyond merely giving a handout to the people: it has macro economic impacts as it shores against the multi-sector hyper inflation that a removal would induce with respect to the cost of ALL goods and services.

Thus which is of greater value - a 300 billion subsidy which protects the market from unsavory hyper inflation and cushions the masses (bearing in mind that the subsidy first arose from the incompetence of government) or a 1 trillion budget for lawmakers salaries?

The strike is meaningless unless Oil Production and Exportation is shut down.

Simplified Argument No. 5 -

Is Nigeria going bankrupt? The government parrots the bankruptcy argument as part f its reasons for the removal of PMS subsidy.

Given that the true cost of subsidy is less than 300 Billion - which equates to about 2 billion USD -

How does a nation that earns > 30 billion USD per year from the sale of crude oil go bankrupt on account of a petroleum subsidy costing 2 billion USD?

The same nation had about 80 billion USD as reserve only 2 years ago.

Deduction: The dissapearance of that reserve is not a consequence of the subsidy: even if the preposterously contrived figures of the government were to be believed. The bankruptcy argument is thus a sham.

Simplified Argument No 3

POINT: PMS ought to be a local product. It always was a local product whilst the refineries functioned at an acceptable level, and this is the minimum that should obtain before anything else is contemplated. At 141, PMS would cost in Port Harcourt about what it costs in New York: Which is ludicrous given that much of the PMS sold there originates as Bonny Light Crude in Nigeria. As a local product, PMS ought by all accounts be cheaper in Nigeria, than it is half way across the world.

Simplified Argument No 4

POINT: The Multiplier Effect: The abrupt increment in the cost of PMS will have a ripple effect on inflation of virtually ALL goods and services across the local market: this will tanslate not only to increased cost of living (generated from the cost of a commodity that ought to be a local product) but also thereby reduce the competitive capacity of Nigerian Enterprises. The over-all cost of this as a nation would far exceed the cost of what the subsidy was in fact: 300 billion only - and NOT 1.3 Trillion.

^ There is not, and has never been, a 1.3 trillion subsidy. That is a preposterously corrupt contrivance which the government ought to have been ashamed to advance in the first instance.

Given that that is a corrupt contrivance, the building block for ALL the main arguments in favor of subsidy removal is destroyed.

IF we agree that:

1. The subsidy has been funded under 300 billion pr year over the last decade, and even in the year preceding last year [FACT]

2. 300 Billion would not suffice for the "development" and "amenities" and "imprivement" of life which the government talks about

3. 300 billion per year CANNOT bankrupt the government (where the budget exceeds N4 TR)

Then it is obvious that the core arguments made by Mrs Okonjo Wahala regarding the subsidy issue all fail: and the only recourse is to address the hydra headed corruption which quadrupled the cost of the so called subsidy.

lagerwhenindoubt:
A sad reality is that "Economists" such as Sanusi Lamido and Iweala and FEC work on a simple analogy - Stick an injection into a sick patient and the illness is cured - whether the patient is in the right condition for the drug or how he will react is not up for discussion. after-all it is Nigerians we are talking about, we thrive under such conditions  

Critical point.

The point is that 1.3 tr is a corrupt figure. This so called subsidy has been financed under 300 billion for more than 10 years. The sudden increase to 1.3 tr represents corruption of the highest order. The government needs to deal with that corruption - especially as this astronomical increase has occurred within one year only.

It is not a coincidence that that year ws an election year.

In addittion, that same year witnessed the depletion of the external reserves to an unprecedented degree.

Gentlemen, this fellow has cleaned out. Now he wants you to pay the price.

^ Corruption.

Obviously not yet?

The subsidy was indeed paid for at less than 300 billion per year for over ten years before 2011. Indeed, the 2011 budget provided for less than 300 billion.

SUMMARY OF FIRST ARGUMENT: THE REAL SUBSIDY IS <300 BILLI0N - NOT 1.3 TR. THIS SUM CANNOT JUSTIFY EITHER THE MACRO EFFECT OF THE REMOVAL OR THE ARGUMENT THAT SUCH A SUM WOULD DEAL WITH THE INFRASTRUCTURE DEFICIT WITHIN A BUDGET OF > 4 TRILLION.

Lets proceed to the second simplified argument.

Simplified Argument No. 2.

POINT: The subsidy arose as a result of the advent of fuel importation. Fuel importation arose as a result of the failure of the refineries. The refineries failed as a result of the failure and incompetence of government. The government was thus subsidizing it's incompetence.

Therefore -

- The government needs to correct its failures which led to the subsidy regime

- Either drectly or through PPPs

- Before seeking to shirk responsibility for payment of a subsidy which was brought about by its incompetence.  the advent of fuel importation. Fuel importation arose as a result of the filure of the refineries. The refineries failed as a result of the failure and incompetence of government. The government was thus subsidizing it's incompetence.

Therefore -

- The government needs to correct its failures which led to the subsidy regime

- Either drectly or through PPPs

- Before seeking to shirk responsibility for payment of a subsidy which was brought about by its incompetence.

I just attended the mass rally against the removal of Fuel Subsidy at Falomo in Ikoyi, and it was quite an experience. I was particularly struck by the common resolve of the people: rich and poor stood side by side and spoke the same commitment.

My thoughts floated over to some of the arguments on this forum and  FELT that perhaps, just perhaps, those who argue vociferously in favor of the government in this matter would happen to be at such a rally they might understand a few subtleties about the history of mass movements that might slightly shift their perspectives. They might be persuaded to understand that it is important for the leader to sense the mood of the critical mass in critical matters. They might also be persuaded to understand that this protest is coming at a sensitive time for protests in world history: a time that favors the protester: and must importantly that there exist such creatures as "a bad time for a good idea" as well as "bad implementation of good plans". Beyond all these, they might come to recognize - and this was the theme of all the speakers at the FALOMO protest: that this is no longer so much about the subsidy itself as it is about the corruption and profligacy of government.

Every economic mass protest in history has tended to be about the profligacy of the aristocracy in the face of the suffering of the masses. It surprises me that pro government commentators who condemn the protests do not recognize this simple fact. There is also a question of deficit of trust.

At all events I have realized that no amount of emotion or sentiment (not that emotion or sentiment have no place in these matters) will suffice to draw the attention of commentators who argue in favor of the government in this matter. For this reason, I have decided to advance kindergarten simplified arguments to drive home the point.

I call them kindergarten arguments not because they do not bear the force of soundness: but because they are rendered in a simplified form that makes them difficult to refute - at least in my view. I have no doubt that there will yet be refutations of every kind.

Simplified Argument No. 1 -

Point: The removal of the subsidy is advanced as an action that will release massive funds for development. This will only be true if indeed the funds are as massive as claimed (N1.3 TR). In reality, the funds are NOT as massive as claimed because the subsidy has been funded under 300 billion for more than ten years. It suddenly quadrupled to the currently claimed amount only in 2011.

- This means that the real funds to be released from actual subsidy would be in the region of 300 billion and not 1.3 tr.

- This means that the funds mentioned as justification for the removal are not in fact so

- This means that a non-corrupt removal of the subsidy would in fact only save less than 300 billion - which is by no means a sum sufficient to fund or advance the infrastructure deficit which the government complains of.

- This means that the excess (between 300 billion and 1.3 tr) are monies which are actually being corruptly acquired

- This means that the correct thing for the government to do will be to identify and prosecute the persons and institutions facilitating this massive fraud.

-  This means that if the government does this, the cost of the subsidy will be no more than 300 billion - which sum is not outrageous and which sum cannot be claimed as that which is needed to develop our economy or meet our infrastructure deficit - especially within a budget exceeding 4 Tr. Naira.

This is kindergarten argument No. 1.

I will return with many more.

Plaetton! Pls delete the email address in your quote of my post in pg 1.

chrisj2000:
It's very very important for people to know that god doesn't exist.

I would strongly suggest that you do not found the organization on such a premise as this. For the simple reason that it is an absolutist claim to make: and an organization dedicated to the development of Knowledge should not be premised on dogmatic absolutist claims.

It is my view that it would be far better to render the organization as an Afrocentric Organization dedicated to teh spread of humanism in Africa as a counter-weight to religionism. The Organization should also serve as a knowledge development centre in order to broaden the world view of people.

This approach is superior in my view primarily because it avoids unnecessary antagonism.

@ Plaetton: Please delete the email addy in your quote of my post above. Thanks.

Ok, pls delete the email addy in your quote, cheers.

. . . .on second thoughts "for knowledge and enlightenment" is presumptuous. Very presumptuous. So perhaps just "The African Humanist [and Knowledge Development?] Centre"?

^ Supported. If you are game, hit me at 88888@gmail.com and we can jaw jaw on developing such a centre.

Name: The African Humanist Centre for Knowledge and Enlightenment

Let's do it!

MAYOWAAK:
Food for thought: 469 NASS members gulped N1.12 trillion in a yr & it's ok. But 160 Million citizens (Cabal inclusive) spent N1.3trillion & it became an ISSUE!!!!!!!

Word!

manny4life:
Still doesn't change that her position ISN'T a political position but an appointed one.

It is not an elective political position, but it is and remains still an appointive political position.

At all events, most critically, she is a public officer - paid to serve the interests of the public.

Your analogy with the judiciary is way off. The judicial establishment has its specific role and its norms are designed to insulate it from interference, influeunce and other forms of pressure. This is because there is nothing democratic about the judiciary in terms of its decision-making: it is specifically required to shun influence and deliver interpretations of the strict letter of the law.

Most pertinently, you should note that parliament is empowered under the constitution to summon and question any minister on any questions related to such a minister's duties. Parliament is representative of the people and this underscores the understanding that as executive public officers, ministers certainly do remain answerable to the people. This does nothing to vitiate the fact that their executive reporting line lies in the direction of the president. The Constitution recognizes ministers as public officers and as such, in a supposedly open democracy, why should i not be able to walk straight up to a minister and ask him a question of secular import?

I bumbed into Odein Ajumogobia at a wedding recently, and did just that.

Gbawe:
Thank you my intelligent brother. I dont know if at all those arguing in favour of this blanket subsidy removal understand the rudiments of nation buildings to include the very important consideration that a nation focused on development and blessed with visionary leaders must "do things its way" to control completely the use of natural endowment, first and foremost , for local development !!!! What , largely, is responsible for Africa's underdevelopment (aside corruption) if not how our leaders are never bright or patriotic enough to discern external policies formulated to ensure our natural resources do not primarily benefit our quest for rapid development? What do some think many brilliant economists mean when they talk of "unfair trading" and "unfair economic/fiscal policies" towards African nation?

Even current history hitting the world very hard, i.e the credit crunch, is fluidly demonstrating the folly of wanton greed and the unchecked excesses of capitalism. We must adopt a template of development that suits our peculiar current circumstances , vis-a-vis stage of development balanced with usage of natural endowment, without anyone insisting we copy those far more developed than us !!!!

Would we ever have a say in whether Western nations, to aid a particular stage in their development, subsidize certain sectors or not? They do it automatically !!!!! I.e stick a finger up at the world and do what is best for them !!!!! This is what has provided, through history, many examples of protectionism !!!! We all saw how, with Europe drowning, Cameron still bravely used a veto to do what he believes is best for Britain recently !!!!

It is only us Africans who are never visionary enough to understand that genuinely using our natural endowment towards ourselves first and for what is best for us is the best way to develop. We are better off hankering for leaders who understand this concept than backing the action of those who clearly don't

Even if , as a major oil producer, we decide to supply refined derivatives of crude to our people free while selling to the world to earn income and foreign exchange, then that is our prerogative as something we are allowed to do while , holistically, we attempt to get it right!!!!


If Government is serious in Nigeria, then it should simply announce a state of emergency in certain sector within which all hands will be on deck to ensure we meet time-line targets. For example, this Government can announce that subsidy wil be removed in 2 years predicated on all hands being on deck to ensure refineries work, transport infrastructure is improved drastically through innovative fund-raising, thorough and sincere reform of the NNPC, PPRRA, genuine reform of customs to aid better border control, a robust fight against corruption particularly to ensure the oil sector serves the nation and not a few, etc, etc . If those conditions are then not met, then we don't remove subsidy !! Simple as that. We cannot argue for subsidy removal while Government is indolent, corrupt, irresponsible and unwilling to lead by example with the sort of sacrificial atitude we are seeing worldwide today !!!!

It should never be up to anyone to tell us , at a key stage in our development where we should be turning around decades of corrupt practices and the ruination stemming from adopting wrong policies , that Nigerians must pay a certain amount for fuel consonant with world prices. What an absurd consideration given that , as a third world nation, our oil endowment should represent one of the tools we must use for our development. If our leaders have not done the right thing then the argument should not be that we suffer for their incompetence, corrupt tendencies or indolence.


It is our fuel and we can use it creatively and in a socially responsible way to ensure the development of the majority in the most cohesive and logically heirachical manner !!!!

We should take examples from what major oil producing nations, many with better per capita income and infrastructural development than us, are doing !!! Why do we let ourselves be bamboozled to the extent we now wish to support the visitation of avoidable hyper-inflation , due to economic theories that will ordinarily work best for developed nations, on a nation where nothing works ?

I am not posting here anymore! Every single word needed to be said has been perfectly captured in this excellent post! I have nothing more to add! Brilliantly articulated!

LeoMax:
The Economy will collapse in the next 2 yrs if Subsidy stays.

This is a gross, sinister, greedy capitalist exxageration invented by Ayatollah Sanusi and Messiah Iweala.

Granted, NASS financial burden is great. Jonathan has no constitutional backing to slash pay. Its impeachable offense.

He has powers to withhold presidential assent to their ridiculous financial proposals.

Does he have the nerve to stop the patently ILLEGAL constituency allowances which the legislators continue to receive - and which make them the highest paid legistors in the world? If he is interested in saving money, tell me if he has the nerve to use presidential power to veto this obnoxious and outrightly unconstitutional regime? ? ? ?

We differ on issue concerning revamping the old refineries. I will say, Government needs to use the funds saved from subsidy removal to upgrade our old refineries while the private players start building new ones based on subsidy removal. Its a way to kick-start.  We cant wait to revamp the old ones to build new ones as we do not know if the Administration after GEJ will stay on the policy. What has to be done must be done now

Come on. Wake up! A refinery can be built in a shorter time and less expensively than you imagine!

LeoMax:
What defies Intelligence and knowledge of history is that you want the very Nigerian government who has bad history in the past to invest in refineries. This is a private sector business with government owning a stake in it maintain equilibrum and effect pricing so the citizens wont be shortchanged. As far as subsidy stays and price fixed at 65 naira. It will be foolhardy to put billions without any hope of Returns on Investment.

In the natural course of things, if the refineries were properly maintained, this problem would never have arisen. Side by side the publicly owned refineries, there could be liscences given out. If the public ones fail, the private then dominate - just as happened in telecomms with Nitel and Mtel now redundant - but the industry still booming.

The sequence of events was simply as follows -

1. Failure of Refineries

2. Scarce PMS

3. Government resorts to subsidized importation as a stop gap measure

4. Refineries are abandoned

5. Fraud, round-tripping, smuggling, over-inflation, etc flood the PMS importation regime

6. -------> Including the fraud of the N1 Trillion magic (increase in subsidy cost from N300 billion to 1.3 trillion in 1 year)

7. Government removes the subsidy and leaves the cost of the imported fraud on the common man - without attending to the question of refineries.

LeoMax:
Subsidy removal is overdue.

No, not all - it becomes due only when the end to end production of PMS is localized.

During the Town Hall meeting @ Lagos, NOI mentioned that Feds is working on merging ministries and parastatals to reduce cost of running government.

Reduce the cost of government? Come on. Seriously? With such things as the billions padding the NASS and 1 billion worth of presidential food. Seriously now.

Let me add that the Private sector players were awarded licences to build refineries, but these private investors can not do anything as far as government keeps price of PMS at 65 naira.

No: such investors cannot do anything so long as we are flooded with subsidized IMPORTED fuel - with its attendant fraud and round-tripping. In the event that such local refineries were operating in the absence of the regime of importations, business would be smaking. The cost would also be much less: it is basic to state that such local refineries could have a concessioned local price for crude - under a thousand different possible structured arrangements.

Aside from this, it is wrong for you to state that the refineries at full installed capacity - could not suffice for local consumption. This is an absolute falsehood. The capacity problem is the fact that these refineries have been systematically sabotaged over the years and do not turn out beyond an aggregate of 30 per cent of capacity.

Many countries in the world subsidize one thing or the other. Agriculture has been subsidized heavily in the United States.

Even our 3 refineries at installed capacity can not produce enough.

FALSE. And there should be four, and not three.

LeoMax:
It defies all intelligence how people want Feds to pay subsidy and keep price permanently on 65 naira despite changing prices at the World market. Even if a barrel of oil costs less than 50 dollars and price of PMS goes to $300 government must pay subsidy. Its obviously absurd !

Friend, what is absurd is to miss the elementary fact that the Nigerian product ought to be a local one and not subject to the vagaries of the international market - because the crude is locally produced and all that has ever been required is local refining capacity. It was same capacity that fell short that necessitated the introduction of PMS importation - which was supposed to be a stop gap measure. What is absurd is that that stop gap measure has now become the permanent measure - and the public now must pay for the governments willful determination not to fix the refineries.

That is just point no. 1.

There are zillions of more points.

Beaf:
Bros, you still de here?
I thought by now you would be leading hoards of unwashed, wild-eyed, froth-mouthed Neanderthals on a scary REVOLUTION!
What happened to your "owners of Nigeria?" They got scared? LOLZZZZZZZZZZZZZZZ!!!!!

Aluta!

www.nairaland.com/attachments/180447_ROTFLMAO_gif3d0c775232c7f27cf80592785b9635b6

*Sigh*

I find it amazing that Beaf is still able to post anything on this board.

Oh well, i guess that's why he makes do with puerile pictures only these days.

A commentator who can never contradict the object of his critique is a waste of space and time.

[quote author=Rhino.5dm link=topic=838496.msg9893048#msg9893048 date=1325677557]He spent over a billion naira in handing over to himself??[/quote]I sometimes have reason to believe that the amount of money stolen from Nigeria is more than enough to bridge Nigeria's infrastructure deficit.

OK, Mods, heres a quick and easy way to prove the OP completely wrong - please put this thread -

https://www.nairaland.com/nigeria/topic-838496.0.html

- on the front page -

It's an article by Femi Fani Kayode asking GEJ some pertinent questions.