Fuel Subsidy is a major channel for corruption? #OccupyNigeria

You can't put a cart before the horse and expect to move forward!

Millions of Nigerians this week, starting today, are gathering in different parts of the country to protest against corruption, petrol price increase and bad governance.

Do you know that this struggle is not just between the government and the masses? The fight is between the government and masses on one hand, and persons who are bent on continuing their age-long “milking” of the system for their personal benefits, on the other hand.
So while we OccupyNigeria against a greedy bunch of government leaders, lets not forget to include the others who although are not part of the 3 arms of government are key stakeholders in ensuring Nigeria remains under-developed, for their benefit! Some of them are fighting the removal of fuel subsidy because it will also be a big blow on their callous activities.

Okay back to the purpose of this blog post- to share the benefits of fuel subsidy removal that has been silenced all the brouhahas. However, this is not an approval stamp for the government to go ahead with their insensitive implementation.

By now you are used to hearing, "fuel subsidy removal is good but the timing is wrong" or "Fuel subsidy removal is good but we cannot trust a corrupt government with it!"


Here are some facts from the government:

Do you know that:

• Petrol Subsidy is a major channel for corruption?
• The inefficiencies of the subsidy regime have created an enabling environment for corruption to thrive. A small group of wealthy persons have benefited significantly from this system with little benefits accruing to the common man.
• Petrol Subsidy will eventually bankrupt Nigeria?
• 30 percent of total federal government expenditure or about 4.2% of GDP is spent on payments to fuel marketers as petrol subsidies, yet the government has to borrow a fraction of this figure to finance the budget deficit. This level is unsustainable and this unlimited liability exposes the government to volatility in oil prices.
• Petrol subsidy is denying Nigerians jobs?
• Since 2000, about 20 refinery licenses have been issued to private investors which should have led to hundreds of thousands of jobs being created but not a single refinery has been built because the subsidy will not allow investors to recover costs.
Removing the monies paid to petroleum marketers as subsidy is the only way out. But where will the savings go?
The Federal government has established a Subsidy Reinvestment and Empowerment Programme (SURE – P) that Nigerians can use to hold government accountable. The discontinuation of the current fuel subsidy will save additional resources for investing in programmes targeted at mitigating poverty and spurring economic growth.

• Healthcare—many of our mothers, sisters, and daughters are dying in childbirth. At 545 deaths per 100,000 live births, Nigeria has one of the highest maternal mortality ratios in the world. In addition, our children are dying from preventable causes. 1 in 6 children will die before age 5. The SURE – Programme will provide additional N 73.8 Billion to save the lives of 12 million pregnant women and children over the course of 4 years. 

• Youth Employment— over half of Nigerian youth are unemployed, a socially unacceptable phenomenon. The SURE Programme has earmarked N81.1 billion to provide 370,000 jobs per year across the country for the unemployed youth through labour-intensive public works scheme, vocational training and youth employment programmes.
• Urban Mass Transit Scheme – given that Nigerian households spend between 30 to 40 percent of income on transportation, the government’s SURE programme has allocated N20.5 billion to increase mass transit availability in order to alleviate the transportation challenges of ordinary Nigerians.
• Roads—our roads have become death traps! Nigeria is ranked 191 out of 192 countries in the world with un-safe roads, with 162 deaths per 100,000 population, resulting from road traffic accidents. An additional N283 billion will be invested into the road sector, under the SURE programme, to complete over 1,326 km of high-quality roads across the country.
• Power—our epileptic power supply is crippling the growth of this economy. The SURE programme will invest N195 billion in the construction of large, small and medium hydropower plants that will generate a cumulative capacity of 2740 megawatts of electricity, while also providing counterpart funding for the development of coal power projects with a potential to generate 1000 megawatts.
• Food Supply—how can a country so blessed with arable land and hardworking people continue to spend about US$10billion on food imports? The removal of subsidy would free resources for a drastic increase in investment in Agriculture to ensure food security for our people.
• Other critical infrastructure investments –funds from the SURE-Programme will also be invested in the following sectors: Petroleum, ICT, Niger Delta, Agriculture, and Water. Specific projects include:
- Construct 3,877km of railway lines;
- Revitalize irrigation projects on 28,850 hectares of land;
- Build 3 new refineries with a combined output of 30 million litres of petrol in Bayelsa, Kogi, and Lagos States.
- Completion of the East West road across major towns in the Niger Delta.

In spite of the good intentions of this removal of petrol subsidy, the Nigerian government should learn to put one foot in front of the other. You can't put a cart before the horse and expect to move forward. Tackle corruption first, clean out the skeleton in your closet and corridors of power, then come back and create a dialogue about the removal of the fuel subsidy with Nigerians, who put you in that office to serve.