Why oil, electricity subsidy must end, by Emir Sanusi

The Emir of Kano, Muhammadu Sanusi II, made a case for a total but gradual removal of subsidy on oil products and electricity tariff. The emir, who was speaking at the 3rd National Treasury Workshop in Kano, said government must take a bold, but difficult decision of addressing the problem of these two sectors for the country’s economy to flourish.

“100 per cent of what we earned in the petroleum sector went out to import petrol. You are treasurers, is this sustainable? The country will be bankrupted and we are heading to bankruptcy,” the traditional ruler said. The emir asked what was so crucial about petroleum products that the nation had to sacrifice education, healthcare and infrastructure just to have “cheap petrol” and risk the financial stability of the country.

“It is a difficult decision but if the president wants to deal with poverty, he has to deal with this. And you have to tell Nigerians that they have to be ready, if the international price of oil goes up, people must be ready to pay more and if it goes down people will benefit. We have to be responsive to what happens everywhere,” he added.

“Now we have this situation where people need to be told the truth because people don’t understand that N1.5 trillion into fuel subsidy is N1.5tr out of education, healthcare and infrastructure and that is why we have so many children out of school and that is why we have problem of malnutrition. And where are you going to get the money to solve these problems if all the money is going into petroleum sector?” the emir queried.

The emir said the consumption of power and petroleum products are private individual decisions and government could not fight poverty by subsidizing these products. “As treasurers, you are not just accounting money and keeping it, you are managing it and your duty is to tell the president, Sir look at these numbers, we cannot afford this, and if we continue spending billions on fuel subsidy, spending hundreds of billions on power subsidy this country will go bankrupt.

“And I am hoping that, again what I have said is simple honest contribution to you, so that you can begin to push through, even though it is difficult.” The emir also said, “Nigeria is the only country whose balance sheet does not benefit from an increase in the price of oil, and this does not start with this government, it has been on for 20, 30 years.

Today you have tension between America and Iran the price is going up, every oil producing country is going to be happy because it is going to earn more. But in Nigeria, we are going to earn more and we turn round and spend what we earned on importing petroleum products.” Earlier in his opening remarks, the Accountant-General of the Federation, Ahmed Idris, said the objective of the workshop was to promote accountability and transparency in all facets of the nation’s finance and management architecture.

“It is expected that participants should appreciate that accountability and transparency remain major watchwords for prudent financial management practices and are therefore, major prerequisites for economic growth and development,” he said.

In his goodwill message, the acting Chairman of the Economic and Financial Crimes Commission (EFCC), Ibrahim Magu, said the best strategy for fighting corruption was to mobilize everybody to take part, as no one had the monopoly of knowledge.

He charged the participants of the workshop to take lead in the fight against corruption being critical stakeholders in the financial sector.