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Subsidy Removal: From bombs to the Bomb

By Ikeddy ISIGUZO, Chairman, Editorial Board

BOMBS, bombs and more bombs marked 2011 as the year of bombs. Few would remember the elections, except for the leaders it produced. Still fewer will think anything of 2011 more than the fears a sect imposed on it.

From a few explosions in 2009, bombs have become a part of our lives. They go off before we can count them properly. As if taking over from the year of bombs, 2012 started with the bomb – the new petrol price.

This bomb hit all parts of the country. The government to assure Nigerians it could get things done, once they were of interest to it, threw its own bomb on January 1. People reeling from the shattering consequences of the bombs, their tears running, their sorrows deepened, if they were in Church in Madalla, for instance, took this explosion from government. Who will rescue us?

Government’s positions are firm, fixed, and fixated. The price of petrol has been awarded a free fall. Market forces, free, unrestrainedly raging and taking our people to the next level of poverty, have been unleashed on us. Government expects patriotism to blind us into accepting the fallacies it is selling.

Bomb Blast

The proudly Nigerian economy is being transformed without electricity. The transformation will be without Nigerians, who have no clue whether they would have jobs tomorrow or be able to pay the transportation costs to their place of work. Are Nigerians expected to eat, wear clothes, live in houses, and send their children to school in 2012? The transformation of the economy will take care of these whenever it is concluded – if ever it is concluded.

Subsidy, government says, will collapse the economy. Without it, the economy would blossom in months. We are waiting.

A few questions expose the dubiety of subsidy. Government would save about a quarter of the 2012 budget, by removing subsidy. Why is the expected money, which it is appropriating for roads, rails, education, not reflected in the 2012 budget? How does it intend to appropriate this money, including to the States, without the National Assembly?

Section 80 of the 1999 Constitution is clear about disbursement of federal revenue. It states, “(1) All revenues or other moneys raised or received by the Federation (not being revenues or other moneys payable under this Constitution or any Act of the National Assembly into any other public fund of the Federation established for a specific purpose) shall be paid into and from one Consolidated Revenue Fund of the Federation.

(2) No moneys shall be withdrawn from the Consolidated Revenue Fund of the Federation except to meet expenditure that is charged upon the fund by this Constitution or where the issue of those moneys has been authorised by an Appropriation Act, Supplementary Appropriation Act or an Act passed in pursuance of section 81 of this Constitution.

(4) No moneys shall be withdrawn from the Consolidated Revenue Fund or any other public fund of the Federation, except in the manner prescribed by the National Assembly.”

If there were savings from the withdrawal of the subsidy, why would government require World Bank loans to buy its famous buses that would wipe out our need for petrol? Where are the savings?

Subsidy is a bogey, expectedly; the savings from subsidy removal is phantom. Government knew what it was spending on subsidy because it pulled off the $8 billion from public money to fund the corruption it sustained over the years.

For government to save subsidy money, it would have to make a budget of it (again from public funds) detailing what it would do with it. This second part of the deceit about the gains from the removal of subsidy will manifest shortly, when government goes into more borrowing to finance its operations. It is the time bomb.



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