Victor EzejaAs Nigeria’s economy continues to reel under the weight of debt burden and high cost of fuel subsidies, Labour Party presidential candidate, Mr. Peter Obi has hinted on taking a pragmatic approach to end it when elected as president.
Fuel in recent years has been taking a significant part of the country’s annual budget. The national assembly had in April this year approved N4 trillion for petrol subsidies for this year as a result of higher global oil prices caused by the Russia-Ukraine war. The Minister of Finance, Budget and National Planning, Zainab Shamsuna Ahmed announced in July that the government could spend up to N6.72 trillion in 2023 for subsidy payments if it continues with it.
Obi who was the guest speaker at the Private Sector Economic Forum organised by the Lagos Chamber of Commerce and Industry (LCCI) on Monday, September 19, described subsidy payment as an organised crime that is draining the country financially, adding that the government’s approach in handling the sector was also responsible for the cases of crude oil theft.
He promised to end the subsidy regime and corruption around it through effective measures such as tackling insecurity that is ravaging the country and putting a stop to oil theft.
“If we come to government in 2023, one thing that we must decisively and aggressively deal with is the issue of security. Insecurity is the number one thing that is impacting Nigeria’s economic growth today. And I need to deal with it as quickly as possible.
“We need to overhaul the entire security architecture, including having multilevel policing involving the federal, state and community and equip them properly with modern gadgets.
“Nobody will be able to kidnap, keep his victim somewhere and use phone to negotiate ransom with his victim’s family” without being caught.”
He also pledged to encourage the emergence of local refineries to boost the production of petroleum products for domestic use.
“Petrol subsidy is an organised crime. I have said it that 60 per cent of the subsidy is corruption. That will be dealt with decisively. Secondly, we will aggressively start to ensure the promotion of local refining that is private sector driven and supply them crude oil in Naira to refine for domestic consumption.
“With the removal of subsidy, we will effectively reduce corruption to a minimal level, reduce the bloated cost of governance and above all, support and incentivize export to stabilize the currency exchange rate.”
On food security, he said the antidote is to tackle insecurity headlong so that farmers can go back to their farms. “If you deal with insecurity and our farmers can go back to their farms and we remove subsidy and deal with corruption our inflation rate will drop.”
Obi also noted that there are large expanses of uncultivated lands in the northern part of the country, adding that they are a great source of physical asset that his administration would invest in to boost the economy.
Speaking on power sector challenges, which also affect the growth of the nation’s economy, Obi stated that if elected as president in 2023, his government would embark on liberalising the entire value chain including the transmission subsector, to boost power supply.
This according to the Labour Party presidential standard-bearer, would involve supporting private sector investment in, especially, the transmission infrastructure which has remained under government control.
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“Power is something everybody is worried about. I know very well that the federal government as of today has removed power from the exclusive list to the concurrent list. But I will go further than that. Our power problem today is that we have privatised generation and distribution but left power transmission untouched.
“For me, the first thing I will do to ensure a steady power supply is to liberalise transmission. This is critical if you are going to deal with our power sector. We will support the existing companies in the distribution and generation arms by ensuring that there is a dedicated gas supply which is one of their problems today.
“We will ensure that the generation, transmission and distribution are properly aligned. We will ensure clear certainty of policy and regulatory environment for them to operate. We will support them with access to funding that is attractive and deal with some of the tax incentives. We have to ensure that renewable energy is embedded in our power process.’
“My administration will aggressively support the private sector to invest in the power value chain through a multifaceted approach, particularly the transmission infrastructure,” Obi stated.
He further stated that the issue of the power sector would be treated as an emergency by his administration with all possible measures to ensure a constant power supply.
“The issue of power will have to be an emergency that we will have to deal with all means possible to ensure that we have power. To have the resources to do this, we will involve the private sector. The government does not need to be entirely involved. Government involvement will be to provide sovereign guarantees,” he said.
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