PRESIDENT Muhammadu Buhari, while stressing why it would be difficult for his government to reverse itself on the removal of electricity subsidy, said his government had spent close to N1.7 trillion to supplement electricity tariff shortfalls. The President, who was represented by Vice President Yemi Osinbajo at the first-year ministerial performance assessment retreat last Monday where he said this, added that the country could no longer afford to subsidise electricity and refined petroleum products.
What the President left unsaid at the event is that with its decision to remove subsidy, the government would be saving oodles of money annually. However, this was put succinctly by the Minister of State for Petroleum Resources, Timipre Sylva, who said on Thursday that by withdrawing subsidy from Premium Motor Spirit (PMS), popularly known as petrol, the government would be saving more than N1 trillion annually. According to the minister, while the subsidy regime held sway, the government was budgeting about N500billion annually for subsidy while at the same time losing about N500billion yearly to foreign exchange concessions granted oil marketers.
From the foregoing, it is crystal clear that if the government sticks to its gun of withdrawing subsidy from both electricity and petrol, the government would get richer while the masses would get poorer. Nigeria is already the global headquarters of both poverty and under-5 mortality. It also holds the unenviable record as one of the countries with the highest levels of youth unemployment despite its natural endowments. With poverty escalating as a consequence of the government’s decision on subsidy, life for the average Nigeria has just taken a leap from the horrendous to the calamitous.
But as appalling as this appears, it may not be quite terrible if the government gets its acts together and manages well the savings from subsidy removal. With the subsidy removal, the government will be saving close to N1.5trillion every year. The big question to the government is how will it view the freed funds? Will the government treat the money as fund for development or money for expenditure? Would the money be used to sort out the ministers, legislators and the presidency or would it be deployed to improve the lot of the people? Since, this is money that would have been expended on comforting the common man, it is only proper that it should be deployed on projects and programmes that would eventually result in an improvement in the life of everyday Nigerian.
The savings could be deployed into building a new refinery, for instance. The total cost of Dangote Refinery, excluding the fertilizer factory and the pipeline infrastructure, is put at $10billion. This means if the government decides to put the savings from the subsidy removal into building a refinery, it would be able to come up with the funding for the Dangote-like refinery in three years. If the government is able to do this and goes ahead to build a refinery, the price of PMS, kerosene, diesel and even aviation fuel would crash in the country and this would result in improvement in the life of the average Nigerian, more employment opportunities for Nigerians, respite for our embattled currency and more revenue for the government. Wouldn’t that be a good idea?
If the government should resolve to deploy the savings from subsidy removal to building world-class hospitals in different parts of the country, it would go a long way in improving healthcare delivery across the country and put an end to the agony people are subjected to in their search for good healthcare, reduce medical tourism and give the nation’s foreign reserves a measure of reprieve. Again, using Dangote as our model, the business mogul’s foundation is currently building a world-class 1,000-bed health facility in Kano at the cost of N2billion. This means savings from subsidy removal would be enough to afford the government build 500 world-class hospitals across the country in one year and 1,000 in two years. Now, wouldn’t that be a great idea?
Should the government choose to invest the savings from subsidy removal into setting up cottage industries in the country, working on the average of each cottage industry costing N100,000,000, the government would be able to set up 10,000 of such industries in one year. This means each of the 774 local governments can have 12 cottage industries in one year. With each of these employing 20 people, no fewer than 200,000 would be gainfully employed. If this is done for five years, it would make a huge difference in the country. Now, wouldn’t that be a wonderful idea?
But will any of these happen? That is the N1trillion question whose answer is in the laps of the gods.
The fact that must be underscored nevertheless is that unless the government is intentional about making the savings count through proper utilisation of the same, the subsidy removal would be nothing but an eternal punishment on the current and future generations of Nigerians. That would not just be a double jeopardy but a tragedy of immeasurable proportion!
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