President Goodluck Jonathan has once again provided assurances that the removal of fuel subsidy will not only tackle the rate of corruption in the oil sector, it will also generate job opportunities for the teeming unemployed Nigerian population.
In his second Presidential Media Chat in the nation’s capital of Abuja, Jonathan addressed issues he feels are of paramount importance to the people of Nigeria.
Top on the agenda was the question of the controversial fuel subsidy removal which has generated heated debates across the oil-rich country.
President Jonathan spoke to a panel of top media executives – Mr. Steve Nwosu, Editor of the Daily Sun, National Mirror Editor Seyi Fasugba and Chairman of Leadership Newspapers Fatima Akilu – in a discussion moderated by Mr. Kayode Akintemi, General Manger of Operations at Channels Television.
Jonathan attempted to impress upon the press the point of the exercise, which he said must happen in order to save the oil-rich nation from impending economic doom.
Responding to a question from Leadership’s Mrs. Akilu, who questioned if Nigeria is too “broke” to handle subsidy payments, President Jonathan said: “We are not broke, but as a responsible father, you save for your children.”
The President sees the removal of the fuel subsidy as a step toward getting the country on the path of fiscal responsibility.
“The present rate at which we borrow is no longer sustainable,” President Jonathan said, adding that the incredibly high fuel subsidy payment made in 2011, amounting to N1.3 trillion, was borrowed.
He explained that being an oil-rich nation does not mean having funds in excess, and insists that continuing to subsidise fuel will not only damage the foreign reserves but also worsen our debts.
President Jonathan further argued that while Nigeria is still seen as a top crude producer, the same may not always be the case, referring to studies that said the oil-producing nation’s oil supply might dry up in the next half century.
He stressed the importance of focusing on other sectors of the economy that will prove more sustainable, mentioning agriculture for instance.
“You must look at other options for the country to generate income,” Jonathan said. “Assuming in the next 50 years Nigeria does not rank as oil-producing nation, what will be the source of income?”
“We must go back to agriculture, we must go to manufacturing and we have to start it now.”
He said his administration is determined to not leave a liability behind for the next generation or administration.
However, the question of just how beneficial this subsidy removal is to the masses still remains in question. Panel member Nwosu asked the question plaguing many Nigerians: what happens to the funds no longer geared toward subsiding crude product?
Nwosu commented on the Federal Government’s recurring promise to rebuild refineries and increase the capacity of the present refineries, which Petroleum Minister Diezani Alison-Madueke in a previous discussion with the Senate said were now working at 60 per cent capacity.
Jonathan said the exercise will ensure that the Nigerian National Petroleum Corporation, NNPC, is kept out of the business of marketing petroleum products and made to focus on its regulatory role in the oil sector.
The President said his government is talking to Chinese groups that will invest in building new refineries and is working with the private sector to ensure 100 per cent ownership of said new refineries do not go to foreign investors, thereby creating jobs for Nigeria’s unemployed.
He further explained that the new function of the NNPC for the time being will be to concentrate on building the nation’
en two months.”
“The last time I asked about the reserves, which was early part of this month” President Jonathan said, “the GMD told us that we have reserves that can last us for 55 days.”
He compared us to other countries that do not produce oil and yet have far deeper oil reserves.
Apart from building reserves, Jonathan mentioned that deregulating fuel will open up the economy to more investments as well as create more job opportunities for the country.
He said it is time to stop subsidising the rich and turn the funds toward benefitting the poor. However, with many of the poor masses bemoaning the negative effects fuel subsidy removal will have on them in 2012, many might find it difficult to see the situation from the President’s view point.
Jonathan insisted that deregulating the downstream sector will ensure that subsequent administrations and future generations of Nigeria are not faced with challenges that could plunge Africa’s most populous nation into financial difficulties.