Wednesday, January 11, 2012

State govs initiated Fuel subsidy removal - Minister

THE Minister of Finance and Coordinating Minister of the Economy, Dr Ngozi Okonjo-Iweala, has said that state governors entered into an agreement with the Federal Government on the removal of the fuel subsidy. 

In her reaction to criticisms that she was solely responsible for the hike in the price of petrol, Okonjo-Iweala stated that the state governors were equally in support of the subsidy removal, adding that the decision was not taken by the Federal Government only.

Speaking on ‘Matters Arising,’ a programme of the Africa Independent Television (AIT) on Tuesday, the Finance Minister, while articulating that the benefits from removal of the fuel subsidy far outweighed the present hardship the people are facing, stated that she was not responsible for the removal of the subsidy, as many people had claimed, adding that the decision was even taken six months before she joined the administration of President Goodluck Jonathan.
“I was not there six months ago, when the state governors deliberated and agreed on the removal of fuel subsidy. Most of the governors then were aware. So, it would be unfair to say that I am solely responsible for this. What of the governors?” she said, adding that, “I am sure it is the people who don’t want me here in the first place that are spreading this false information around.”
Dr Okonjo-Iweala, therefore, tasked Nigerians to be fair and objective in their criticisms, as far as the removal of the fuel subsidy is concerned, insisting that the decision to remove fuel subsidy, as claimed in many quarters, was not determined by her alone.
While pleading that the people should try to understand the initiative of the government, which is geared towards a sustainable economic development, Dr Okonjo-Iweala further reiterated the resolve of the Federal Government not to deliberately inflict hardship on the people, saying that with the removal of the fuel subsidy, Nigerians stood a better chance of improved living conditions, more job opportunities, functional refineries, among other services.
The finance minister identified with the pains of the people, saying that “the fuel price would not remain high forever.” She added that “this is a tough decision for any government to take. Ghana also took the decision recently. We know it is not an easy decision for the Federal Government, but it is a decision for the good of the people.
“This money will be used to improve delivery of services for the people. Let us put the money into areas that will facilitate production, such as provision of power supply, providing state-of-the-art hospitals, especially to curb the maternal mortality rate. Government would invest heavily in refineries, which will be sustained by private investors, as well as hydro power projects. This, including others, would create more jobs for our people,” she said.
While commenting further, the Central Bank of Nigeria (CBN) governor, Mallam Sanusi Lamido Sanusi, also harped on the need for the people to understand the sincere motives of the government, insisting that the removal of the subsidy is indeed a necessary step out of an impending economic collapse, hence the government’s decision to remove the subsidy.  He added that the removal of the fuel subsidy was a collective decision by stakeholders such as the National Executive Council (NEC), the state governors, among others.
Speaking on the reason the government introduced palliative measures after the removal of the fuel subsidy, the CBN governor said, “removing the subsidy is a necessary course to address the root cause of poverty in the nation. Palliatives would not solve the problem. We do understand how Nigerians feel. They should also try to understand us. Let us not forget that the increase of fuel subsidy is not a new development. It occurred during General Ibrahim Babandiga’s regime, Obasanjo’s regime, both as a military head of state and democratic president.”
While lamenting the economic situation of the country, the CBN governor expressed displeasure that the nation’s manufacturing capacity is less than five per cent, while Nigeria imports most of the goods it consumes. “We import rice. We import milk and package it here. We import wheat. The country’s economy cannot be sustained with this,” adding that the Federal Government’s policy on fuel subsidy removal would not only help to revive the already failing economy, but would also provide the necessary platform for the improvement of the living standard of the Nigerian masses.
Meanwhile, the Federal Government is said to be weighing several options in relation to some of the state governors who have been linked with secretly sponsoring anti-subsidy removal protests in their states.
Sources in the administration confirmed, on Tuesday, that government had earlier received reports indicating that some governors, especially in some southern states have been linked with the sponsorship of anti-subsidy protests.
“What happened is that indigenes of some of those states were indifferent to the removal of fuel subsidy in the very first week. And in order to galvanise protests, some government persons were seen to have mobilised the sporadic protests witnessed last week,” a source said, adding that politicians in the states had actually hijacked the labour-induced protests which started on Monday for personal gains.
According to sources, “reports reaching the Federal Government indicated that some state governors have decided to play politics with the subsidy removal and turn around from what was decided at the National Economic Council (NEC).
Another source said that the strike by labour was becoming suspicious because the same organised labour had refused to go on strike to defend the rights of the people of far North, South-East and South-South who have been buying fuel at prices far above the pump price.
“The people of the North-East and North-West have been buying fuel at N250 per litre, the same for people of the South-South, while the people of the South-East have been buying fuel at N120 per litre. It is not on record that labour went on strike to defend the rights of the people of those areas,” the source said.
Meanwhile, the Federal Government has said that  the International Monetary Fund (IMF)/World Bank did not instruct or direct it to withdraw fuel subsidy, the Minister of Labour and Productivity, Chief Chukwuemeka Wogu, said in Abuja, on Tuesday.
He told the News Agency of Nigeria (NAN) that government took the decision in the best interest of the country and its citizenry and also to stimulate the economy.
The minister was reacting to claims by opponents of the decision that government was taking dictation from the Breton Woods institutions on how to manage the nation’s economy.
He stressed that the Federal Government would not take decisions that were injurious to Nigerians and reassured that fuel subsidy withdrawal became necessary to save the nation’s economy from going adrift.
Wogu argued that the subsidy withdrawal policy began 15 years prior to 2012 under past administrations and that it was time to put the economy on a straight path.
“Whether our policy is driven by IMF, it is not.
“For the past 15 years, right from the regime of General Ibrahim Babangida, down to that of General Olusegun Obasanjo, even General Abdulsalami Abubakar tried it by increasing the pump price of fuel, till now.
“Every government has tried to do it because of the benefits that will be derived from it; other countries are equally doing the same; we are just arriving at the scene quite late.”
Wogu told NAN that African and non-African countries which had toed the line of subsidy removal in the past currently had very vibrant economies.
“In the countries that have done it before, who have now come out to be one of the strongest economies in the world, is Brazil.
“Brazil did it and people were agitated that this was not in the best interest, but with the passage of time, look at what Brazil has turned into, generating a lot of jobs, creating a lot of rich people, the same thing will happen in the country.
“And then you can see that because of the global economic issues, Ghana, for instance, is in the media and has removed subsidies and they’ve done their own deregulation in the oil and gas subsector.
“The only thing we are asking Nigerians to do is to be patient with the government so that at the end of the day, we will be able to reap the benefits of this policy.”

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