The above phrase, I borrowed from my Alma Mater secondary school, the Government College, Umuahia (‘Up Umuahia’)! This is a metaphor and a mark of excellence in all endeavorseavours. It is a great emotion born from upbeat that I feel towards the present administration. Nigerians are witnessing a kind of revival and a sense that we as country are moving in the right direction.
President Goodluck Jonathan and his administration deserve full support from all Nigerians. He came into office, and inherited a nation with wasteful economy and unsustainable oil subsidies. The oil subsidy when His Excellency, President Goodluck Jonathan took office, was N1.426 trillion per annum. This figure was published by Nigerian National Petroleum Corporation (NNPC) August 2011. But ordinary Nigerians never benefited from the oil subsidy.
Well, the President and his team of economic advisers appointed Senator Magnus Abe as Chairman to review Oil Subsidies! Chairman Abe and panel quickly discovered that many marketers were unqualified for the job; and some used false claims to defraud the government.
The requirements are listed as follows:
1. To own tank farms (petrol depots) of not less than 5000 metric tones.
2. Should be registered with the Corporate Affairs Commission (CAC) as oil companies.
It was discovered that only 11 marketers actually own storage facilities, the rest were sharing depots with Filling Stations; and some were registered constructioncompanies! A real cesspit of corruption was uncovered. Nigeria was infested by Mafia-style (Cartel) – a form of gangsters, making it hard for the economy to grow.
The President and his team knew that to continue the subsidy further, is a step closer to serious economic collapse. First, he pushed for greater accountability, good governance and ensures more transparency. This effort on the part of the President and his appointees, exposed how wasteful the subsidy was dished out and who the beneficiaries are. Chairman Magnus Abe of the Senate Committee investigating Oil Subsidy, discovered that construction companies that have nothing to do with oil were getting subsidy!
Nigeria has 20 licenses for refineries in the last 10 years, yet none has taken off!!
The President wanted to get rid of Oil Subsidies, but Organised Labour Union called for strike action. Then, the Labour Union called off strike after some agreement with the government was reached.
We all know that ‘entitlement as in oil subsidy once given is usually difficult to take back’. It is a remarkable feat for the government to wiggle its way out of the volatile issue and come out successful. In short, all Nigerians will benefit from discontinuation of unsustainable Oil Subsidy. Otherwise, Nigeria would have been heading towards economic cliff – equivalent to National Bankruptcy or ‘Economic Suicide’.
Well, with the removal of the Subsidy, a litre of petrol would sell for about N140 instead of the subsidized price of N65. Later it was adjusted to agreed level of sale that convinced the Labour Union to call of the strike action.
For the upturn, removal of Subsidy will benefit Nigerians in the long run as follows:
1. Sustainable growth of a viable oil production industry.
2. Establishment of more refineries in the country.
3. Creation of jobs.
4. Availability of petrochemical products.
5. Reduction of pump price of petrol due to competition.
6. It will make it unattractive for smugglers to take our fuel to our neighbouring countries.
7. Nigeria will stop subsidizing the fuels consumed by our neighboring countries!
8. The country will be able to lay solid foundation that would bolster strong economic growth.
9. With N1.4 trillion being freed from oil subsidy payment, all branches of government are better placed financially to deliver democratic dividends.
The developed economies have continued to apply subsidies in areas of social services as transport, energy, and agriculture. EU countries borrow to subsidize.
For African countries, the challenge is for sheer availability of a service.
Refining crude oil would give the country, Nigeria, higher stakes in a deregulated market, stimulate medium scale service industries, and provide greater job opportunities for the teaming skilled unemployed citizens.
Yes, President Goodluck Jonathan and his administration, understands this fact too well. Actually, to continue to keep fuel prices artificially low is not only a bad economic strategy, but also would eventually bankrupt the country. His Excellency articulated this fact, when he said: “To re-invest the money from Oil Subsidy into the Energy and Infrastructure sectors”. So, let all Nigerians support the government and wish for better Nigeria.