THE National Economic Council (NEC) rose from its meeting at the State House, Abuja, on Monday reiterating its support for the withdrawal of petroleum
subsidy next year, as it believes that the consequences of removing it are less than those that Nigerians will suffer if it is retained.
NEC, which is composed of the 36 state governors, ministers of Finance, National Planning, the Chief Economic Adviser to the President and governor of Central Bank of Nigeria (CBN), is presided over by the vice-president, Alhaji Namadi Sambo.
The Council has also authorised states interested in distributing electricity to do so subject to their procurement of distribution licence.
Briefing State House correspondents after its last meeting of the year, Anambra State governor, Mr Peter Obi, who was joined by his Ondo State counterpart, Dr Olusegun Mimiko, Minister of National Planning, Dr Shamsudeen Usman, and the Minister of Power, Professor Barth Nnaji, said the removal of subsidy was a question of inevitability judging by the current debt portfolio of the Federal Government and gains expected.
He said the issue was extensively discussed by the Council, following the presentation by the Federal Government, which indicated that subsidy could not be sustained while also showing the benefits that would accrue to Nigerians when withdrawn, more so as the Federal Government was putting “safety net” in place.
“It is a case of inevitability, considering the level of present debt portfolio of the Federal Government and the continuous financing of it. As the president said, either way there will be grave consequences and one is lesser if we take it. There is no place such decision has been taken that people do not feel a temporary pain,” he said.
Obi observed that the opposition to the deregulation of the downstream sector of the petroleum sector arose from mistrust of government in the past.
According to him, “everybody will work together to see that this is achievable, but there is a safety net, which has been outlined. What is happening is a case of Nigerians not trusting the government and it is a case of making a mistake, because you can’t use the process of yesterday.
“Those who think of yesterday and today will miss tomorrow. Because people think [because] there was so much waste yesterday how are we sure that if this one happens it will be utilised properly? But there is a firm promise, it is documented and it is for all of us to hold on to it. If we do it, yes there might be temporary problems; but the gains far outweigh the consequences if we don’t do it.”
The Anambra State governor also revealed that NEC had decided that state governments that wish to distribute power using existing power distribution companies could enter into partnership with such companies but those that want to utilise their own companies could now apply for a licence.
The Council has, therefore, set up a committee headed by Governor Liyel Imoke of Cross River State to look into power distribution situation and harmonise it in view of the current decision.
Other members of the committee include Governor Mimiko, representing the South-West zone; Governor Gabriel Suswam of Benue State, representing the North Central; Kassim Shettima of Borno State, representing the North-East, and Governor Patrick Yakowa of Kaduna State, representing the North West, while ministers of Power, National Planning, Chief Economic Adviser to the President and the Director General of Bureau for Public Procurement are members.
On security, the Council agreed on the need to work assiduously to enhance security in the country in order to continue to attract investments.
Meanwhile, following increased criticisms against the plan by the Federal Government to withdraw the fuel subsidy, the presidency, on Monday, intensified lobby for the subsidy removal policy.
In other to woo the support of critics, the presidency said that funds saved from the proposed withdrawal would be judiciously utilised and channelled towards building critical infrastructure.
In fact, it went further to name some of the "critical infrastructures" that would be funded with the money that would be saved.
The Special Adviser to President Goodluck Jonathan on Political Matters, Alhaji Ali Gulak, who spoke to journalists in his office, listed the projects to include second Niger bridge; Mambilla Hydro Power station and the railway projects across the nation, saying that President Jonathan was consulting with stakeholders on the issue of removal.
Gulak added that the president was “consulting widely” on the matter.
The clarification, he maintained, was to correct contrary claims that there was no widespread consultation by Jonathan on the controversial policy.
Alhaji Gulak urged Nigerians to support the policy, since there was "a compendium of projects that will be executed from the money to be saved."
On the directive by President Barack Obama of the United States of America (USA) that its agencies should use state resources to defend gay rights against the passage of anti-gay marriage bill by the Senate, the political aide warned that foreigners who violated Nigerian laws would be prosecuted.
He said: "What the US fails to know is that we have different cultures and there is no part or culture in Nigeria which supports homosexuality or lesbianism.
“Our laws are for us and not for Americans and anybody who comes from anywhere into this country must obey the laws of this country or they would be tried according to our laws,” he added.
Meanwhile, the Chairman of Northern Governors' Forum and Governor of Niger State, Dr Aliyu Mu'azu, on Monday, disclosed that if the Federal Government must go ahead with the proposed removal of fuel subsidy, palliative measures must be put in place as a succour for the poor who would bear the brunt of the removal.
This is coming as the governor of Lagos State, Mr Babatunde Fashola, who was represented by his Special Adviser on Political and Legislative Matters, Mr Muslim Folami, warned that the proposed removal of fuel subsidy would increase crime and unemployment rates, as well as standard of living of Nigerians.
Dr Aliyu, however, added that the rationale for deregulation was to ensure removal of government’s overbearing influences so as to allow greater competitiveness and consequently spur higher productivity and efficiency by allowing individual investors to put in their resources in running the businesses that were hitherto the exclusive preserves of the government.
The governors spoke in Abuja during a one-day National Roundtable for Good Governance, organised by "The Initiatives," on the theme: "Deregulation in an emerging economy."
The Niger State governor also noted that “with the removal of oil subsidy, the state will get more money, apart from the palliatives that will come from the removal of oil subsidy, as states will get as much as N8 billion."
According to him, the fuel subsidy removal “will, in turn, free the government from the bondage of continuous financing of extensive projects which are best suited for private investments by encouraging efficiency and effectiveness in resource utilisation, reducing government borrowing while raising revenue and promoting healthy competition in a free market economy.”
Aliyu, however, berated duplicity of government agencies saying, “the government has over 400 agencies that are not fully functional because we do not need more than 100 agencies, as some are even duplicated in their functions as this roundtable is expected to provide the necessary platform that will help the Nigerian economy to fully prepare for and embrace the new direction.
“With the current trend in global economy, Nigeria must learn to catch up with the rest of the world or risk being left behind, for instance, with well over 3,557 kilometers of rail track network across the country, the Nigerian rail is in parlous condition and requires prompt injection of huge capital far beyond what the public funding can offer," the governor said.
Also speaking at the event, Director of Research for the Central Bank of Nigeria (CBN), Mr Charles Mordi, said that the call for the removal of fuel subsidy was aimed at curtailing frivolous spending of the nation’s resources.
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