By Abba Hamisu Sani
Africa-Press-Nigeria .The World Bank has decried the continued spending by the Nigerian government on petrol subsidy, which it said is on track to gobble up N2.9tn this year.
Bank Country Director for Nigeria, Shubham Chaudhuri, stated this on Monday at a panel session of the 27th National Economic Summit, said the country could channel the money being spent on subsidy to primary healthcare, basic education and rural roads.
Fomer CBN Governor Sanusi Lamido Sanusi who is an advocate of Oil subsidy removal for years said is Illegal To Pay Petrol Subsidy From Federation Account,
The former Emir of Kano Speaks virtually as a panelist on Sustainable Development Goals (SDGs) at the Economic Summit.
He added that , the Nigerian daily oil consumption data is suspect thus there is endemic corruption in fuel subsidy payments.
“So it is a fundamental constitutional issue because this is money that should go to the federal, states and local governments. Yet money that belongs to the federation is carried out as federal government expenditure. So, there are so many complex issues, legal and economic . We need to stop these issues” he said.
Sanusi also advocated for the end of fuel subsidy and electricity subsidy, saying the money saved should be invested in critical sectors like education and health adding that the long-term gains far outweigh the short-term pains.’
The Chairman, the Nigerian Governors Forum and the Governor of Ekiti State, Mr. Kayode Fayemi, also agreed that subsidy payments had to end for resources to be free up for critical investments.
Also speaking at the session, the Minister of Finance, Budget and National Planning, Zainab Ahmed, said the Federal Government had made provision for petrol subsidy till the end of June next year.
“In our 2022 budget, we only factored in subsidy for the first half of the year; the second half of the year, we are looking at complete deregulation of the sector, saving foreign exchange and potentially earning more from the oil and gas industry,” she said.
The World Bank director, who likened Nigeria to a malnourished individual needing urgent treatment, said some critical decisions need to be made now for the country to realize its potential.
He said, “I think the urgency of doing something now is because the time is going in terms of retaining the hope of young Nigerians in the future and potential of Nigeria. The kinds of things that could be done right away – the petrol subsidy; yes, I hear that six month from now, perhaps with the PIA (Petroleum Industry Act) coming into effect, this will go away.
But the fact is can Nigeria even afford to wait for those six months? And there is a choice: N3tn to PMS subsidy which is depriving states of much-needed revenues to invest in basic services.”
The Chairman, Presidential Economic Advisory Council, Prof. Doyin Salami, said he had argued for a long time that subsidy really needed to go.
He said, “With the PIA essentially it makes illegal petrol subsidy and yes, there is a period where NNPC and the new regulatory agencies must calibrate themselves, but at the end of this period – and I think it is about six months, which explains why the minister has said for the first half of the year, there is provision.
D.r Kabiru Sa’id Sufi who is a Kano base political Economist and Lecturer at College of Education and Preliminary Studies Kano described Petrol subsidy removal issue
as something that having lingering for long time in Nigeria.
Sufi says the alarm raised by the World Bank on the negative impact of petroleum subsidy payment at the expense of other development sectors is valid.
The analyst also stated that with the regard to what the Nigerian Minister of Finance say’s on the total removal of the Subsidy by July next year (2022 ) as the 2022 budget only captured the subsidy payment for six Month after which the sector will be fully deregulated ,is a source of concern as many Nigerians that are of the oppinion that if the subsidy is removed the price of Petroleun will be high as the pump price will be determine by the Global Market.
The situation that may translate in to the change prices of other Commodities and Services, like Transportation , production costs and all most every thing in the country.
The Lecturer says if Nigerian Government can revive and maintaned its refinaries and support the establishment of more private ones like that of Dangote Petro Chemical refinary the fear will be eliminated as the price may even be lower than the expectations of the Mases .
Sufi emphasise on the fear if Government can within the stated six Months can put all the machanism needed in place to achieve Full deregulation and transition.
Kabiru sufi also expressed that if local refinaries can provide all the needed refined petreleum in the country that will save the nation alot of Money for the benefit of other sectors such as health care provision , education and other infrastructural deveploment.
