The Petroluem Subsidy withdrawal :The need for a sober reflection.

The Petroluem Subsidy withdrawal :The need for a sober reflection.

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By Abdullah Dan’azumi Golkos. CEO Salasadiscourse Pol. Consults.

Once again Nigerians have found themselves in the unending debate about the removal of subsidy on Petroluem Products.

As usual, the debate which is being championed by the advocates  of the removal  comprising mostly of Government officials and economists, and opposed by organised labour supported by the opposition parties, have polarised the society into those for and against.

 Each factions stand is determined by their assumed protection and concern for the vulnerable members of the society who are bearing the brunt in the form of diminishing resources for economic development because of diversion to pay for subsidy, or will bear the brunt if the subsidy is withdrawn in the form of costs of services.

While there is cause to be sympathetic to the welfare of the vulnerable, it is pertinent to ask whether they are the primary beneficiaries of the subsidy or simply secondary beneficiaries who are being used to justify a policy to prop up a tiny majority that is holding Nigeria to ransom by its jugular veins?

The response of those opposed to the removal is based more  on emotions and sentiments than facts. The opposition parties, including the present political class when not in power, have always found it as a cheap weapon to join forces with organised labour to  blackmail the ruling party, only to make a u- turn when confronted  with reality of what the subsidy is all about and its impact on the society.

While in other climes energy is being subsidised as rightly pointed out by the Chairman of the Nigerian Labour Congress, a recurring theme, it may not be prone to abuse and corruption as in Nigeria. It is the high level of corruption that makes the situation unbearable and unsustainable economically. 

According to Prof. Ukpang, an Economist at the  University of Uyo, Akwa Ibom State who with regard to the proposed removal of the subsidy said, ” Economically, it is  the right thing to do. 
You don’t pay lower than what it cost to produce goods. It would end corruption. Our problem is not fuel subsidy, it is the corruption around it.”
The statement above remind us of the mind boggling revelations of corruption and abuse involved in subsidy by the Faruk Lawal Committee set up by the National Assembly to go to the roots of the issue. Unfortunately, the Committee in a case of “A twist in the tale”, was to consume Lawal who is now serving a Jail term in Prison.
But even before then, those who were disposed to  know the facts of the subsidy, have always been not only critical of it, but also but has described it for what it is. According to Dr Iweala, the then Nigerian Minister of Finance in 2011, described the fuel subsidy as ” nothing but a waste of resources and a huge needless economic scam.” 
Could such a person who had nothing to gain by subsidy withdrawal and have everything to gain by retaining subsidy if so wished, exaggerate?
This position was echoed by Sanusi Lamido Sanusi when he was the Governor of the Central Bank of Nigeria. He had cause to repeat it at a Colloquium to mark the Sixtieth anniversary of his birth when he stated that, ” Many years ago while I was screaming about the Trillions being spent on Fuel subsidy, I remember there was actually an attempt to attack my house in Kano. I was in the Central Bank. Where are we today? We are face to face with the reality today that this Fuel subsidy  is unsustainable.”
According to Zainab S. Ahmed, Nigeria’s present Finance Minister, N100b is spent monthly on subsidy. And of this amount, how much goes into the provision of goods and services which the vulnerable members of the society benefits, and how much acrue to those involved in the Oil business?
This is neither justifiable nor can the economy sustain it. And is this situation defensible?
Buhari as a private citizen and a Statesman was made the Chairman of the Petroleum Trust  Fund established by the late Sani Abacha to which the proceeds of a partial subsidy withdrawal was channelled.
 The fund was utilised to undertake projects with direct impact on the society which are still visible today Inspite of attempts by others who later tried to discredit it for Political reasons.
 The time has come that Nigeria has to accept the reality that the subsidy regime which was initiated in good faith have lost all credibility and has become a cash Cow to a very small clique who are holding it by the Balls. The concern should now be how to manage the resources to cushion the impact of the withdrawal on the vulnerable and in which all Nigerians will benefit.
Nigeria cannot afford to be held to ransom by a group whose life has come to depend on subsidy to the detriment of all. Nigerians deserve better. It’s time for Nigerians to take a sober look at subsidy. removal devoid of sentiments which has becloud us from seeing its Economic merits.