Review… Is anyone worried about that supplementary budget?

In from Stanley Azuakola . . .

The Senate on Tuesday approved N574.532 billion as Nigeria’s 2015 supplementary budget. That approval jacked aggregate government expenditure in 2015 from N4.493 trillion to N5.068 trillion.
Of the N574.532 billion supplementary budget, a massive N521 billion would be used for the payment of subsidy claims. That is 91 per cent (more than half a trillion naira) of the total sum and it would be expended just to pay off oil marketers for products which a majority of Nigerians did not purchase at the official price of N87/litre.
This is probably the time for us to panic. Not because President Muhammadu Buhari has said Nigeria is going to borrow all that money to fund the budget, but because he is refusing to see how unsustainable this arrangement is going forward, and how it is going to eventually ruin us if we do not end it.
President Buhari’s stubborn insistence (so far) to maintain payment of fuel subsidies stems no doubt from a fair mind which believes that it will be a disservice to the poor if citizens of an oil producing nation like Nigeria still buy the product at market value. But beyond fairness, the president’s eyes have to be opened to objectivity and practicality and see that this scheme doesn’t benefit as many Nigerians as he thinks. That in itself is a form of unfairness.

Read also: Economy… No longer at ease with ‘I pass my neighbour’

“A lot has changed, since the #OccupyNigeria anti-subsidy removal protest rallies in January 2012, especially with a new federal government and many are convinced that now is the time to end fuel subsidies.

There were a number of reasons many people argued against subsidy removal in 2012 chief among which were: a distrust of the federal government at the time under which subsidy claims increased by over 300% to $8bn in the 2011 election year; their failure to move against those who had defrauded the nation through the subsidy scheme; and the absence of a well thought out safety net for the poor.
With the election of a new government headed by Buhari, a man perceived as more trustworthy, there is a sense that savings from a future cut in subsidies won’t end up in private pockets. There are recent precedents to this in both Indonesia and India, where the election of new and more trustworthy presidents gave those governments the courage to remove subsidies and it did not lead to protests unlike previous attempts.
Also, the new federal government is showing signs that it is thinking of proper social safety nets for the poor like the Conditional Cash Transfer program for the most vulnerable Nigerians; the school feeding program; among others.
Although the removal of subsidy will be a sacrifice, its benefits in the short and long term look pretty. Fuel queues, the kind Nigerians are currently suffering, will go as marketers won’t have to wait for government to approve billions in claims; there will be more incentives to set up private refineries; huge cash will be freed up to invest in profitable areas; and in one fell swoop, it will solve the signature corruption of that sector.
“The truth is that we are faced with two options… either deregulate and survive economically, or continue with a subsidy regime that will continue to undermine our economy and potential for growth, and face serious consequences,” said Ex-President Goodluck Jonathan in a January 7th, 2012 broadcast to Nigerians. He was right; he just wasn’t the man to do it.

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