Why Nigeria has not removed fuel subsidy – Buhari
By Ukpono Ukpong
President Muhammadu Buhari has defended the Federal Government’s decision to keep paying fuel subsidies.
Buhari made the defence while responding to questions posed by Bloomberg News, stressing that the effects of removing fuel subsidies would have been too harsh on the Nigerian people.
He said the government is working on boosting local capacity in order to stem the inflationary pressures that are likely to be triggered by a removal of subsidies.
“Most western countries are today implementing fuel subsidies. Why would we remove ours now?” What is good for the goose is good for the gander!”.
“What our western allies are learning the hard way is what looks good on paper and the human consequences are two different things.
“My government set in motion plans to remove the subsidy late last year. After further consultation with stakeholders, and as events unfolded this year, such a move became increasingly untenable.
“Boosting internal production for refined products shall also help. Capacity is due to step up markedly later this year and next, as private players and modular refineries (Dangote Refinery, BUA Group Refinery, Waltersmith Refinery) come on board.
“The exchange rate is still susceptible to external shocks that can suddenly and severely affect Nigerian citizens. As we step up domestic production – both in fuel (enabled by PIA) and food (agricultural policies) – the inflationary threat shall diminish, and we can move toward unification, “he said.
President Buhari also said that international trade has remained rigged against food security in Africa.
He said that the EU’s policies in particular the ‘new economic deal between the EU and Africa’ are all rhetoric of open trade as their Common Agricultural Policy subsidy programmes and export of those subsidized goods create dependence, undermine Africa’s self-sufficiency, and cause food poverty and starvation.
“We can only imagine what food inflation would be today had we not initiated organized programmes to boost domestic production. And still, we do not grow enough domestically.
“Initiatives such as the Nigeria Anchor Borrower’s programme, helping farmers compete against artificially lowered imports has boosted rice production to 9 million metric tonnes in 2021 from around 5.4 million metric tonnes in 2015. Even in the years of drought, rice production outstripped pre-2015 levels. Imports have fallen to near zero. We are making progress.
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“Against these advances international trade remains rigged against food security in Africa. The EU’s policies in particular (It’s time for a new economic deal between the EU and Africa) are all rhetoric of open trade – yet their Common Agricultural Policy subsidy programmes and export of those subsidized goods create dependence, undermine Africa’s self-sufficiency, and cause food poverty and starvation, DailyTimes gathered.
“If only out of enlightened self-interest the West – and particularly Europe – must step up. The moral if not economic case for doing so is unarguable. Do nothing, and more migrants from across the Sahel will attempt dangerous journeys to reach Europe.”
Speaking further, he also spoke on the moves by the Federal Government to take advantage of the gas supply crisis in Europe.
He said that what Nigeria need is a long term partnership not inconsistency and contradiction on green energy policy from the UK and European Union.
While noting that investment is hampered by their broad-brush moratorium on overseas gas projects, President Buhari said that at home the same projects are classified as green.
“Four years ago, we unveiled plans for a new gas pipeline connecting Nigeria to Europe. Last week (2nd June) – in record time – the Nigerian National Petroleum Company (NNPC) entered into an agreement with the Economic Community of West African States (ECOWAS) for its construction.
“Concurrently on 1st July the NNPC will become a Limited Liability Company and be subject to more robust auditing and commercial disclosure obligations. It will help stimulate investment and boost transparency, where corruption has deterred the former and stymied the latter.
“My administration is the first to pass this landmark reform in our oil and gas sector, after two decades of predecessors’ failure to do so – no doubt due to vested interests.
Criminality and terrorism in oil-producing regions hamper production, and it would help if our western allies designated IPOB as a terrorist group, given their complicity in damage to pipelines and infrastructure.
“We have invested in our security forces, including the $1 billion military deal with the U.S. for the acquisition of A-29 Super Tucano aircraft. These efforts are making an impact: wells that had to be closed due to criminality have now re-opened. With these efforts, OPEC has raised our quota for next month.
“We need long term partnership not inconsistency and contradiction on green energy policy from the UK and European Union. Investment is hampered by their broad-brush moratorium on overseas gas projects, while at home the same projects are classified as green. It does not help their energy security, it does not help Nigeria’s economy, and it does not help the environment. It is a hypocrisy that must end.
To change, the UK and EU countries should invest in our planned 4000 km pipeline to bring Nigerian gas – the largest reserves in Africa – via Morocco, then onto Europe.” President Buhari said
Responding to question on the debate around the central bank’s independence following the governor showing interest in running for president, he explained that although, the CBN governor is appointed by the President, the appointment is subject to confirmation by the Nigerian Senate.
“Ultimately, it will be for the CBN’s board of directors to determine whether a CBN governor’s actions have fallen foul of the laws in place to ensure he can most effectively carry out his duties.
“But there is a subtext to the accusations. Because the governor follows a model outside of the economic orthodoxy, he is labelled political. But the orthodoxy has proved wrong time and again.
“Instead, the governor is following an alternative economic model that puts people at the heart of policy. Nigeria should be free to choose its development model and how to construct our economy, so it functions for Nigerians, “he added.
