Emerging events continue to show that the Jonathan Administration in Nigeria seems determined to see through its desire to make oil subsidy a thing of the past in the country.
A document released by the Federal Government on Monday entitled “Subsidy Reinvestment and Empowerment Program (SURE Program)” reveals that the total projected subsidy re-investible funds per annum stands at about N1.134 trillion, based on average crude oil price of US$90 per barrel.
Out of this, N478.49 billion is accrued to the Federal Government; N411.03 billion to state governments; N203.23 billion to local governments; N9.86 billion to the Federal Capital Territory (FCT) and N31.37 billion as transfers to derivation and ecology, development of natural resources and stabilization.
Minister of Information, Mr Labaran Maku, said at a media parley in Lagos, on Monday, that a Board of Trustees would soon be constituted by President Goodluck Jonathan to comprise persons of proven integrity to oversee the implementation of projects to be funded with the money.
According to him, a robust program structure has been developed to ensure adequate oversight, accountability and implementation of various projects. He said: “The entire project will be overseen by a board, which will include a member of the media, while consulting firms with international reputation will be appointed to provide technical assistance to the board in financial and project management.”
Maku explained that an independent body would be responsible for monitoring and evaluating the implementation and would report directly to the board.
According to Maku, while state and local governments were expected to design their own programs by utilizing their portions of the subsidy reinvestment funds, the Federal Government had decided to channel its own share of the resources into a combination of programs to stimulate the economy and alleviate poverty through critical infrastructure and safety net projects.
The minister stated that to transform the economy in line with the Vision 20:2020 objectives, critical infrastructure projects in the power, roads, transportation, water and downstream petroleum sectors would be executed.
According to him, the projects on road have been divided into various sections, which include East-West sections that comprise the Warri-Kalama (87km); Port Harcourt–Ahoada (47km); Ahoada-Kaima (54km); East-West Road (99km) with all of them put at 338km.
He also spoke on the Abuja-Abaji-Lokoja dual carriageway (200km); Benin-Ore-Sagamu dual carriageway (295km); Onitsha-Enugu-Port Harcourt dual carriageway (317 km); Kano-Maiduguri dual carriageway (510km); construction of Oweto Bridge (2km); construction of 2nd Niger Bridge (2km), totalling 1,326km.
On railway projects, Maku mentioned the Lagos-Ibadan Standard Gauge (dual) (174km); Abuja-Kaduna Standard Gauge (187km); Port Harcourt-Umuahia-Enugu-Markurdi-Lafia-Kuru-Kafancahan-Jos-Bauchi-Gombe-Maiduguri (2, 119km); Zaria-Funtua-Gusau-Kaura Namoda (221km); Lagos-Ibadan-Ilorin-Jebba-Minna-Kaduna-Zaria-Kano (1,124km) and Abuja light rail project (52km, all put at 3,877km.
While reiterating the commitment of the government to accountably fund the projects, the minister added that every component of the national developmental program to be financed from the subsidy’s proceeds would be implemented in the next three to four years.
On power, Maku said that the target of the Federal Government was to improve generation capacity through hydro and coal power plants.
According to him, the program would provide counterpart funding for the construction of the large Mambilla hydropower project that would generate additional 2,600 Megawatts of electric power.
It would also provide funding to complete a total of 17 small and medium hydroelectric power projects with a cumulative capacity of 14.275 Megawatts, while a counterpart funding for Public Private Partnership would also be available to develop coal power projects in Enugu, Benue, Kogi and Gombe with a potential to generate 1,000 Megawatts of power.
In the area of petroleum and NNPC projects, the minister said that the main objective of the government was to restore and improve domestic refining capacity and prevent shortfalls in supply of petroleum products.
According to him, three new refineries would be built under a counterpart funding arrangement with private sector in Bayelsa State (100, 000 barrels per day); Kogi (100, 000 barrels per day) and Lagos State (200, 000 barrels per day).
On health, the Federal Government would be targeting the maternal and child health services with the specific objective of increasing the utilization by rural population through demand and supply interventions.
Maku said that the potential beneficiaries targeted by the program were the three million pregnant women per annum and 12 million over the course of the program, representing an average of 50 per cent of the estimated number of pregnant women in the country.
As the government prepares to end oil subsidy early next year, the Nigerian Bar Association (NBA) is girding its loins for a showdown with the government. The Association’s leadership has told President Jonathan to forget about the planned removal of fuel subsidy, warning him that there would be a disastrous consequence.
The NBA president, Joseph Daudu, said during a press conference in Kaduna on Monday that lawyers foresaw victory and liberation for the people of Nigeria but those pushing for deregulation in the present form would depart with more than a bloody nose.
According to him, Nigerians are up for rough times, Daudu regretted that government appeared adamant that the subsidy would be removed, noting that, “the time has come for a final determination whether those in government derive their power from the people or whether they are independent and owe their stay in power to other entities other than the people.
“Subsidy is the difference in cash terms in the final cost of supplying PMS or motor fuel and the price at which the same commodity is sold to the consumer.
“Throughout the Obasanjo administration and up to the close of the Yar’Adua administration, subsidy did not exceed N300 billion, now it has shot up to N1.3 trillion without any corresponding increase in the supply of PMS.
“The deficiency in the argument of the pro-subsidy removal is that it is entirely based on the importation of petroleum products.
“The point that only a few moguls benefit from the existence of subsidy is no argument for its removal as what will be gained from the removal will be transferred to the coffers of the federal and state governments who will, as usual, deal with those fresh funds in the same way and manner as previous funds had been dealt with.”
The NBA urged the government to design a seven-year period of spread removal of the subsidy if it was sincere about addressing the economy.
Daudu said: “The government knows that the proposed policy is anti-Nigerians and that it is not an argument they will win or a policy that can be implemented without imposing considerable long-term hardship on Nigerians.
“In between, Nigerians will suffer and unimaginable socio-political upheavals will erupt, the magnitude not seen anywhere in the world in recent times.
“In order to promote transparency in the petroleum sector, the government should, in the spirit of the Freedom of Information Act, disclose the names of companies and concerns that are currently engaged in the importation and distribution of petroleum products, the cost of subsidy paid to those persons and other benefits enjoyed by them, such as import waivers and tax holidays.
“The government must license and ensure the commencement of production by private refineries in order to obviate any need to resort to the importation of petroleum products.
“The government must divest from the downstream sector of the oil industry, consequently, it will need to divest its interest in the production and retail end which should lead to the scrapping of the NNPC.”