By Omoh Gabriel, Business Editor
Nigeria has spent a total of N 1.8 trillion to subsidised petroleum products in the last four years which the federal government has said is not sustainable.
The minister of state for Finance Mr Remi Babalola made this known at the 2010 edition of the Oba Oladele Olashore Annual Lecture held at the Obafemi Awolowo University , Ile-Ife, Osun State at the weekend .
He said â€œthe diversion of scarce resources in the form of petroleum subsidies, which amounted to N 1.8 trillion in the last four years, was not sustainable in the long-runâ€. He noted that the nation spent over N 1.2 trillion on subsidies for petroleum products between 2006 and 2008; while the subsidies accounted for over N 600 billion in 2009.
According to him â€œfull deregulation of the oil and gas sector remains very imperative.
This will encourage investment in refining and marketing infrastructuresâ€ stating that the legal and regulatory framework for the comprehensive reform of this sector is currently being considered by the National Assemblyâ€.
Babalola, who chairs the monthly Federation Account Allocation Committee (FAAC) meeting canvassed better fiscal and monetary policy coordination to engender macroeconomic stability. He asserted that the huge fluctuations and unpredictability in the price level, exchange rate, interest rate and tax burden were major deterrents to private investment which is the driver of growth.
He also called for the establishment of framework like Sovereign Wealth Fund for the management of oil savings currently in excess crude account.
â€œThis comes with clear rules on investment and withdrawal rather than the current practice of strong lobbying for sharing,â€ he added. |
The Honourable Minister of State for Finance,Â also identified transformational leadership, physical infrastructure development, macroeconomic stability and the deregulation of the downstream petroleum sector, among others, as very fundamental for a new prosperous Nigerian Nation. He listed other fundamentals to include: rule of law, accountability and transparency; governance reforms, enhance human capital development, and employment-oriented development strategy.
Babalola, who was the guest speaker at this yearâ€™s lecture, stated that what the nation requires were positive action, superior performance and efficient service delivery.
â€œWe need to urgently build a capable state wherein peace, security and private enterprise are guaranteed over a sustained period.
â€œThis requires an enabling political and legal environment for economic growth and equitable wealth distribution with sound macro_economic management, institutional reform and overhaul in human capital development,â€ he noted in his speech titled â€œThe Paradox of a Nation: A Socio_Economic Perspectiveâ€. On leadership, Babalola noted that what Nigeria desires is a transformational leadership with shared purpose and vision and not transactional leadership fashioned in the prebendal sharing of excess crude, federationÂ account earnings, rent seeking and crony capitalism.
He said, â€œAs long as we keep having followership that demands patronage, handouts and favours, our search for true leadership will be long and winding.
â€œThe remedies to the maladies confronting our polity cannot be found within the context of the government alone. There is the need for all stakeholders in the Nigerian nation to be alive to their responsibilities.â€ On physical infrastructure, he explained that the existence of a huge resource gap for government had thrown up the urgent need for alternative funding source for infrastructure.
According to the minister, an estimated investment of US$100 billion would be needed in key infrastructure areas over the next five years. He assured of governmentâ€™s priority on infrastructure, as he noted that the issue of funding of infrastructural projects was being addressed through public private partnership ( PPP).