First the policy will be executed in phases and in a responsible manner, Jonathan said. This responsible manner was explained by a top government official as the inclusion of a range of palliatives to cushion the effects arising from the removal of fuel subsidy next January.
Jonathan, who for the first time commented on the controversial policy since he submitted his Medium-Term Expenditure Framework (MTEF) on October 4, 2011 to the National
Assembly, which the removal of fuel subsidy is a major pillar, said the Federal Government would execute it in phases.
The President, who allayed growing fears that the already financially and emotionally sapped ordinary Nigerians by the downturn in the economy would suffer more, said the deregulation exercise would be done in a “deliberate and responsible way.”
He said: “In the event of deregulation, this administration will invest the resources in tangible infrastructure and provide social safety nets and other mechanisms to moderate the impact of the reforms on the most vulnerable segments of our society.”
A source at the retreat told The Guardian yesterday that “in line with the people-oriented approach of the Jonathan administration, the primary focus this time is on areas that will make the most impact. To ameliorate the possible negative impact especially during the initial period of implementation, a range of safety nets targeted at different segments of the population is being finalised.
“The President has instructed the Coordinating Minister for the Economy, Dr Ngozi Okonjo-Iweala to work with the Petroleum Minister and the Economic Implementation Team to ensure that people-oriented palliative measures are put in place to cushion the effects of subsidy removal reality
“For instance, to end the wasteful and inefficient refining of petroleum products outside the country, a key component of the strategies being discussed is to encourage the establishment of more refineries. In fact as a sign of how seriously the government is taking the matter, the government in partnership with the private sector is working on plans to establish a refinery thru a PPP arrangement
“This plan is distinct from the other refineries that will be set up by other private sector concerns in the new post-deregulation environment that will be very friendly to that kind of investment,’’ the team members further said.’’
Apart from the refineries, others are the execution of mass public works projects for youths;
•facilitation of a comprehensive mass transportation system for workers and students of tertiary institutions of learning;
•building and rehabilitating key roads across the country;
•building on the progress made in extending the nation’s rail network. and
•implementing social programmes targeted at pregnant women, children and the elderly
•Improving on the progress being made in power generation and distribution through additional investment.
On Wednesday, the Senate in a motion moved by Dr. Bukola Saraki, debated on the alleged lapses in the scheme and mandated its Committees on Appropriation and Downstream Sector of the oil industry to probe the implementation of the fuel subsidy scheme. The Senate believed that a cartel in the industry benefits from the scheme at the expense of most Nigerians, who are the targets of the policy.
Saraki had said if the Executive arm of government sustained the current tempo, by the end of 2011, it would spend N1.3 trillion on fuel subsidy as against the N240 billion approved by the Legislature.
But at the opening of a two-day retreat for public and private sector leaders on economic development and job creation in Abuja yesterday, Jonathan said his administration was mindful of its manifest destiny of providing the guiding light for the transformation of Nigeria.
The President explained that the planned phased removal of the subsidy would harness revenues for capital stock formation; leverage on private sector investments in public-private partnerships (PPPs) to bridge the gap in infrastructure, and to create incentives for investment in refineries and the petrochemical industries.
A source at the retreat told The Guardian yesterday that “in line with the people-oriented approach of the Jonathan administration, the primary focus this time is on areas that will make the most impact. To ameliorate the possible negative impact especially during the initial period of implementation, a range of safety nets targeted at different segments of the population is being finalised.
“The President has instructed the Coordinating Minister for the Economy, Dr Ngozi Okonjo-Iweala to work with the Petroleum Minister and the Economic Implementation Team to ensure that people-oriented palliative measures are put in place to cushion the effects of subsidy removal reality
“For instance, to end the wasteful and inefficient refining of petroleum products outside the country, a key component of the strategies being discussed is to encourage the establishment of more refineries. In fact as a sign of how seriously the government is taking the matter, the government in partnership with the private sector is working on plans to establish a refinery thru a PPP arrangement
“This plan is distinct from the other refineries that will be set up by other private sector concerns in the new post-deregulation environment that will be very friendly to that kind of investment,’’ the team members further said.’’
Apart from the refineries, others are the execution of mass public works projects for youths;
•facilitation of a comprehensive mass transportation system for workers and students of tertiary institutions of learning;
•building and rehabilitating key roads across the country;
•building on the progress made in extending the nation’s rail network. and
•implementing social programmes targeted at pregnant women, children and the elderly
•Improving on the progress being made in power generation and distribution through additional investment.
Jonathan noted that during the course of the retreat, fiscal and other policy measures would be discussed and urged top political and business leaders “to dialogue openly, frankly and in good faith. Let us consider dispassionately the various policy options and alternative paths that may lead towards our destination. Let us collectively decide on the best course that will swiftly propel us to the attainment of our shared goals as a nation.”
He stated that “as evidenced by our strong economic growth in recent times, our nation has proven resilient to the global economic downturn. However, we face formidable challenges ahead in charting a course towards the achievement of our developmental objectives outlined in this administration’s economic transformation blueprint. Indeed, some of the fiscal, monetary and other risks that we must mitigate and resolve are already becoming more apparent and will require decisive interventions to address them.
“Our external trade and tariff policies are also to be carefully reviewed. There is no denying the need to promote our own domestic industries and protect them from unfair trade practices. We must also adopt a more responsive tariff policy that recognises the limitations of an over-extensive prohibition list. In this regard, we need to arrive at more effective trade and tariff policies that would facilitate the creation of local businesses and jobs.
“We are determined to accelerate the implementation of the 48-hour ports clearance reforms, improve the efficiency of the Nigeria Customs Service (NCS) and other related agencies, and reduce the incentives for smuggling. This administration is also working with the National Assembly to pass the Petroleum Industry Bill (PIB) into law, even as we intensify our engagement with the Legislature and other key stakeholders to agree on critical reforms to the fiscal regime for our oil and gas sector,” he said.
Jonathan added that while several nations were grappling with the grim realities of a protracted crisis, prospects for global economic growth remain unbalanced.
The President said his administration had tried to be pro-active in response to these issues. “Primarily, as part of my administration’s Transformation Agenda, we are adopting and implementing more prudent macro-economic and fiscal policies over the medium-term horizon. We understand that the global challenges also present opportunities for us, as a responsible government, to strengthen our economy by implementing key economic policies.”
Jonathan said some of the policies being implemented by the government included the accelerating economic diversification by improving our investment environment; ensuring that our sustained economic growth results in significant employment generation for wealth creation; and implementing fiscal policies that support the private sector, as it reverts, in line with the national Transformation Agenda, to its traditional role of driving economic development and growth.
The President explained that the retreat, initially scheduled for the Obudu Ranch Resort in Cross River State, was moved to Abuja for the air-safety of the participants.
He stated that after invitations had been sent out, his office was informed last Tuesday that the Bebi Airstrip near Obudu, which was closed down by the Nigeria Civil Aviation Authority (NCAA), had not been officially reopened.
Jonathan said besides the safety factor, it would be illegal to move his guests to Obudu Cattle Ranch using a facility that had been closed down by the NCAA.
He said: “We were to go to Obudu for this retreat and then we announced a sudden change. I felt so sad. We were to travel to Obudu yesterday (Wednesday) before I got a signal that NCAA, that has the sole mandate to declare whether an airspace is safe or not, has closed down the airstrip near the ranch. There is no way I can drag these top Nigerians and business executives of this country there when it has not reopened the airstrip.”
The President said that for the fact that some private individuals had been using the airstrip was not enough for the government to join in the illegality.
He, however, promised that subsequent retreats would be hosted at the resort and similar facilities in the country.
Jonathan called on the private sector to always patronise Nigerian resorts for their events, particularly their yearly general meetings (AGM).
He decried the situation where Nigerian companies move their AGMs to neighbouring countries, noting that there were good facilities in the country for such events.
Co-ordinating Minister for the Economy and Finance, Dr. Ngozi Okonjo-Iweala, said the outcome of the retreat would form part of the 2011 budget details to be presented to the National Assembly by the President.
Okonjo-Iweala led the retreat participants to vote on the problems of the economy, where 60 per cent declared that Nigeria made limited progress in the last five years.
In addition, majority of participants said that Nigeria’s biggest challenge were “infrastructure and too much corruption.”
Meanwhile, the Archbishop of the Catholic Diocese, Ibadan, Bishop Felix Alaba Job, has urged the government to shelve its plan to remove fuel subsidy in the interest of ordinary Nigerians.
Job said the removal of subsidy would reduce the standard of living and increase the level of poverty in the country.
The cleric spoke yesterday at Olupona in Iwo Local Council of Osun State during the graduation of 20 youths from the Olupona Fish Farming Education and Resource Centre owned by the Catholic Diocese.
He observed that the fuel subsidy removal agenda was coming at a point when most Nigerians could not feed themselves while millions of youths were unemployed.
The Executive Director and General Manager, Public and Government Affairs, ESSO Exploration and Production Nigeria Limited, Mrs. Gloria Essien-Dannar, noted that since the recruitment and training programmes began in the farm, the company had invested over N25 million in it.
Another clergyman and National Vice President of the Pentecostal Fellowship of Nigeria (PFN) in the South-West, Bishop Francis Wale Oke, has appealed to the government and the organised Labour to dialogue and take a firm decision on the fuel subsidy in the interest of Nigerians.
He further asked the government and Labour to lay the areas of discrepancies on the issue before the public for other stakeholders to make their input.
Oke spoke at the Apostolic Visitation organised by the Lagos State chapter of PFN.
He told The Guardian after the event that it was sad that Governor of Edo State, Adams Oshiomhole, a former President of the Nigeria Labour Congress (NLC), purportedly supports policies which the union opposes.
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