NEITI backs FG on subsidy removal

18 December 2015, Abuja – The Nigeria Extractive Industries Transparency Initiative, NEITI, has said the possible policy shift by the Federal Government towards removal of fuel subsidy is a welcome development and a step in the right direction.

NEITIActing Executive Secretary of NEITI, Dr Orji Ogbonnaya Orji, said the proposal to remove fuel subsidy was consistent with the recommendations contained in NEITI’s independent audit reports conducted in the last six years, adding that the policy has served as a tool by the rich to exploit the poor.

Addressing a Policy Roundtable on Subsidy Removal Debate organized by the Shehu Musa Yar’Adua Centre in Abuja, Orji said: “From NEITI’s independent audit report, over N4 trillion has been paid as subsidy to marketers from 2006-2012. The breakdown of the subsidy shows that N2.197 billion was paid as subsidy in 2006. This rose to N236.64 billion in 2007 and N360.1 billion in 2008.

“In 2009, the country paid N198.1 billion as subsidy for petroleum products and in 2010 the subsidy payment rose to N416.45 billion. The payments skyrocketed to N1.9 trillion in 2011. Payments of oil subsidy declined to N690 billion in 2012 following the subsidy protests across the country in January of that year.”

Orji argued that Nigeria’s current challenges with the crash in the global oil price make it more difficult to sustain the subsidy arrangements which appear to fund the lifestyle of the rich, while majority of the citizens wallow in poverty.

Orji is of the view that removal of the subsidy will free over N700 billion annually which can be channelled to provision of infrastructure like roads, education, health service, power, security, creation of jobs and basic benefits for the poor in the society.

The Acting Executive Secretary of NEITI regretted that the management of the oil subsidy over the years has been trailed by allegations of fraud, corruption and arm twisting.

According to him, NEITI aligns with the move by the government to remove subsidy and free Nigerians from this bondage once and for all, describing the decision if allowed to stay as a courageous one. He expressed delight that many of the individuals and groups that were opposed to the policy before now have changed their position.

In her welcome remarks, Director General of the Shehu Musa Yar Adua Centre, Jacqueline Farris, explained that the policy dialogue was convened to seek the views of industry experts, development partners, the media and the civil society as well as the academia on the subsidy removal debates and the way forward.

– Vanguard

– Vangu

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