With startling revelations on the colossal sum of money that goes into payment of fuel subsidy annually, it has become obvious that the waste is no longer sustainable as several other sectors that have direct impact on the lives of the people seek attention
State School, Okoro-Nu-Odo, Rumuokoro, Port Harcourt, Rivers State, used to be a no-go area. Due to long years of neglect, the buildings had become dilapidated and constituted a threat, not only to the lives of the pupils of the school but passersby. To save lives, some parents hurriedly withdrew their children from the school, which was founded in 1953. However, the school now wears a very beautiful look. With well ventilated and tastefully furnished classrooms, information communication technology, ICT, laboratory, electronic library, a 300-capacity auditorium, race tracks, football and basketball pitches, a school farm, standby generator as well as a nursery section all equipped with a sickbay, it is a beautiful sight to behold. Parents have not only returned their children to the school, others have withdrawn theirs from private schools to join them. Evelyn Wike, head teacher of the school, told the magazine that the story has changed since the Chibuike Amaechi administration took the bold step to renovate the school along with about 500 others across the state. “We are so excited about everything the governor has done for us. The pupils are given free school uniform, sandals and other necessities. So, they are enthusiastic about learning, especially computer. The environment has impacted positively on the teachers too. Now you can see us wearing suits to the classrooms,” she told the magazine.
Kpugikwa Nwizuga, head teacher, St Andrew’s State Primary School, Ikwerre Road, Mile 1, Diobu, corroborated that position. He recalled the days when pupils of the school were taught under trees without desks on which to put their books. “Before this time, children were learning under trees, sitting on bare floor with neither the tools to learn with nor teach. But since Governor Amaechi came on board, he has turned everything around. Education is not only free in the state but compulsory,” Nwizuga told the magazine. Though parents are not allowed into the school compound, a parent who simply identified herself as Nene, a widow, commended the governor for what he has done for the people. “I am a widow. I am happy with what the governor has done. It has taken a very huge burden off my frail neck. I no longer think of school fees and sandals. I think only of food for my two children in school,” she told the magazine.
The Amaechi education sector transformation is not limited to the primary schools as all the secondary schools in the state have been given a facelift while construction work is ongoing for 25 model secondary schools, one each for the 25 local government areas of the state. Already, seven of these schools have been completed with state-of-the-art facilities and well-equipped accommodation for teachers. They are expected to admit their first set of students in September. For the pupils, they are on their way to achieving their life ambition with the laying of a solid foundation for them by the government.
Seven-year-old Beauty Olunwa of State School, Okoro-Nu-Odo, whose life ambition is to become a medical doctor, said the availability of computers in her school has ignited her interest in further studies. While Samuel Jacob, her 12-year-old counterpart at St Andrew’s, says he is now sure that his ambition to become the second lawyer in his family is on course. Bright Patience, vice principal, administration, Model Girls Secondary School, Rumueme, commended the vision of the governor, arguing that when the foundation is strong, erecting the structure becomes easier.
Soji Oluwasuyi, managing director, SO4 Engineering Limited, a Port Harcourt-based electrical and electronics servicing company, said other state governments and indeed the federal government should borrow a leaf from the approach of Rivers State and subsidise not only education but primary health care and agriculture instead of wasting public fund on fuel subsidy which never get to the people. “What you have seen in the state is an eye-opener. The federal government must stop the wanton waste called fuel subsidy. If the government wants to subsidise any sector of the economy, it should be areas that touch the ordinary man on the street. I mean areas like education, primary health and agriculture which once held the national economy together,” he explained.
Oluwasuyi may just have struck the right cord. Over the years, the issue of getting rid of the monster called fuel subsidy has become a recurring decimal, with former heads of states like Ibrahim Babangida, Sani Abacha, Abdulsalami Abubakar and former President Olusegun Obasanjo attempting at one time or the other to snap it but it has always been met with stiff resistance from labour and civil society groups. The latest was made by President Goodluck Jonathan when he attempted to stop fuel subsidy in last January. Like that of his predecessors, it was frustrated by an unprecedented groundswell of opposition that shut down the national economy for days.
Though subsidy was not originally provided for in this year’s Appropriation Act, the sum of N888 billion was allocated to take care of fuel subsidy under Petrol Support Fund. Ngozi Okonjo-Iweala, finance minister, said federal government has paid N451 billion as fuel subsidy in the first half of this year while N1.3 trillion has also been paid as arrears of last year’s subsidy on 33 million litres of fuel. This brings the total to N1.75 trillion. In 2006, N200 billion was paid as subsidy for 27 million litres of petrol. In 2008 when the average crude oil price per barrel was $100, N630 billion was wasted on 33 million litres of petrol in the name of subsidy. Another N50 billion was released recently, bringing the total to N501 billion. This means that of the N888 billion subsidy bill, only N387 billion is left for spending under 2012 budgetary provisions. This is obviously not sustainable for an economy whose mangers are raising the alarm over a possible recession.
Diezani Alison-Madueke, petroleum minister, said the government was virtually subsidising the entire Economic Community of West African States, ECOWAS, community as the subsidised petrol is smuggled out of the country to neighbouring ECOWAS countries. “If the issue of fuel subsidy was removed earlier as part the components of deregulation, by now, we would have seen private companies, both indigenous and foreign investors, in both domestic and export oriented refineries across the country as they did in the upstream sector,” she said over resistance to deregulation. Funsho Kupolokun, former group managing director of the state-run oil behemoth, the Nigerian National Petroleum Corporation, NNPC, said fuel subsidy is massaging the ego of the rich by the poor. According to him, it is nothing other than robbing ‘Peter to pay Paul’, a development he argued is not sustainable, otherwise the economy will bleed to death.
Since 2009, there has been a global campaign against the regime of fuel subsidy as those targeted by such incentive so rarely get to benefit from it. Angel Gurria, secretary general of Organisation for Economic Cooperation and Development, OECD, said: “Both developing and developed countries need to phase out inefficient fossil subsidies. As they look for policy responses to the worst economic crisis of our lifetimes, phasing out subsidies is an obvious way to help governments meet their economic, environmental and social goals.” The organisation noted that about $500 billion went to subsidy alone in 2010. G20 countries, the International Monetary Fund, IMF, World Bank are also not in support of subsidsing fossil fuel.
Sheidu Olarewaju of the Department of Arts and Social Sciences, Economics Education Unit, University of Lagos, says government should summon the courage and political will to put an end to funding importation of fuel and concentrate on areas that affect the common man. “Government should stop subsidising imported domestic consumption of petrol and build more refineries. The so-called subsidy is an avenue to enrich government cronies. There are conflicting figures from the agencies of government about how much is committed to financing the big racket called fuel subsidy. The government should allow the forces of demand and supply to determine the price at which petrol is sold and bought. Government says it subsidises household kerosene used by the masses in the rural areas to check tree felling. Government sells a litre at about N45 ex depot price to marketers who resell same to the ordinary Nigerians at N170 per litre instead of N50. Government should stop chasing shadows and give subsidy to primary health, agriculture and education, the direct and indirect benefits will improve the welfare of the citizens. As the situation stands now, Nigerians are not benefiting anything from government because corruption has kept the enormous resources of the country in the hands of a few privileged individuals,” he said.
A solar energy expert, Udemba Hyacinth, says Nigeria is part of the players on the global theatre called globalisation. According to him, it was obvious that the effects of Iraq war, Libyan conflict, the current Syrian conflict, Japan tsunami, American and European economic downturn will adversely affect global economy. “Nigeria is part of the global community and what’s happening elsewhere affects us while ours affects others. Therefore, the solution should not be localised,” Hyacinth who is the chief executive officer, Prostar Global Energy Group Limited, told the magazine. He said oil is an international exchange product, adding that whatever happens to the price internationally affects every country, both producing and non-producing countries.
To him, if the subsidy is removed, “we may have some difficulties at the initial time, but will, certainly, adjust to the reality like many other countries. Sectors such as primary health, education and agriculture always come to focus as having direct impact on the people. This is because it takes a healthy nation to go to farm and its only a nation with food security that can boast of good health while education is needed for all round development.” He urged the government to lay bare plans for the removal of subsidy, while Christopher Kolade-led Subsidy Reinvestment and Empowerment Programme, SURE, board takes its assignment seriously.
According to a study carried out in 2009, 70 per cent of Nigeria’s population were said to be living below poverty line, depending on less than $1 per day. Magnus Kpakol, former coordinator, National Poverty Eradication Programme, said the geo-political breakdown of the trend showed that the North-east and North-west shared 71.2 per cent and 72.2 per cent respectively. They were closely followed by North-central with 67 per cent, South-west, 43 per cent, and South-east, 26.7 per cent. A United Nations Children’s Fund, UNICEF, study commissioned last year showed that Nigeria’s unbridled growth in population has put pressure on available resources and overstretched infrastructure. With children under 15 accounting for 45 per cent of the population, the burden is on education infrastructure. Forty per cent of Nigerian children aged between six and 11 do not attend primary school, with the North having the lowest rate of school attendance.
While the United Nations Educational, Scientific and Cultural Organisation, UNESCO, has recommended that all countries should allocate 26 per cent of annual budget to the development of education, the sector has never got any allocation beyond 13 per cent in Nigeria. In the area of primary health care services, the picture is frightening as an estimated 608 deaths per 100,000 deliveries are recorded in the country, a development that has placed the country in the unenviable position of being second only to India in the list of nations with worst infant mortality. According to Women Health and Action Research Centre, an organisation committed to the promotion of intimate and reproductive health and social well-being of women and adolescents, out of 100,000 women that enter labour rooms, 50 of them do not come out alive. With this figure, the group said Nigeria also ranks second in the global number of maternal deaths. UNICEF says every single day; Nigeria loses about 2,300 under-five-year-olds and 145 women of childbearing age. This makes the country the second largest contributor to the under-five and maternal mortality rate in the world.
“Although analyses of recent trends show that the country is making progress in cutting down infant and under-five mortality rates, the pace still remains too slow to achieve the Millennium Development Goals, MDGs, of reducing child mortality by a third by 2015, “Preventable or treatable infectious diseases such as malaria, pneumonia, diarrhoea, measles and HIV/AIDS account for more than 70 per cent of the estimated one million under-five deaths in Nigeria. Malnutrition is the underlying cause of morbidity and mortality of a large proportion of children under-five in Nigeria. It accounts for more than 50 per cent of deaths of children in this age bracket.
“The deaths of newborn babies in Nigeria represent a quarter of the total number of deaths of children under-five. The majority of these occur within the first week of life, mainly due to complications during pregnancy and delivery, reflecting the intimate link between newborn survival and the quality of maternal care. Main causes of neonatal deaths are birth asphyxia, severe infection, including tetanus and premature birth,” UNICEF wrote on its website, adding that a woman’s chance of dying from pregnancy and childbirth in Nigeria is one in 13. According to the body, although many of these deaths are preventable, the coverage and quality of health care services in Nigeria continue to fail women and children. Currently, less than 20 per cent of health facilities offer emergency obstetric care and only 35 per cent of deliveries are attended by skilled birth attendants.
However, under the auspices of Nigeria’s Federal Ministry of Health, the Integrated Maternal, Newborn and Child Health, IMNCH, strategy was put together to accelerate a programme designed to revitalise primary health care in every local government and considerably extend coverage of key maternal and child health interventions, thereby reducing maternal, newborn and under-five mortality in line with MDGs targets.
According to Akinwumi Adesina, minister of agriculture and rural development, economic diversification and food security are important issues that government is attending to. “Mr. President has decided that we must diversify the economy; we must reduce the dependency we have on import of food; we must also create jobs as well as earn foreign exchange from export of our agricultural produce. So agriculture is, under this administration, seen as the centrepiece for diversifying the economy and creating jobs,” the minister told the magazine. According to Adesina, agriculture accounts for 40 per cent of Nigeria’s gross domestic product, GDP, about 70 per cent of all employments in the country but lamented that 70 per cent of the population engaged in the agriculture sector is poor.
“Take the case of cassava. Nigeria is the largest producer of cassava in the world, 34 million tonnes per year, but Nigeria accounts for zero per cent in terms of value added to cassava globally. Thailand is 10 per cent of production but 80 per cent of global value. So we are not adding value to our cassava; as a result of that, our cassava farmers are just poor, they cannot harvest the cassava. The amount of money it takes them to harvest the cassava is so high so they leave it underground. Almost 30 to 40 per cent of cassava in this country is underground. Nigeria spends N636 billion importing wheat to make bread. Nigeria is the only country in the world that does not produce wheat and insists they must eat 100 per cent wheat bread,” Adesina said.
Nigeria accounts for between 85 and 90 per cent of wheat import from the United States, US. It is the world’s largest importer of rice, spending as much as N356 billion annually on its importation, whereas rice can be grown in Kaduna, Sokoto, Kebbi, Nasarawa, Niger, Ondo, Ekiti, Abakaliki and Bayelsa. If the trillions annually wasted on subsidising domestic fuel consumption are directed at these three critical sectors of the economy, analysts say Nigeria will banish poverty and extreme poverty which are the targets of MDGs.
It is also gladdening that the 36 state governors have finally allowed reason to prevail over sentiment and emotion by approving the establishment of Sovereign Wealth Fund, SWF, with initial seed money of $1 billion. It was signed into law via the Nigerian Sovereign Investment Authority Bill recently by President Jonathan. Based on the Santiago Principle, the SWF comprises three investment baskets – the Nigeria Infrastructure Fund, the Future Generations Fund, and the Stabilisation Fund. While the Infrastructure Fund is expected to be used in bridging the nation’s infrastructure gap by investing in the development of critical facilities across the country with 10 per cent of the fund devoted to agriculture and regional government-sponsored development projects that will promote economic development in under-served sectors or regions in Nigeria, the Future Generations Fund will be used to build an inter-generational savings base by investing in longer term assets that generate returns to accumulate wealth for future generations of Nigerians.
The Stabilisation Fund will be used to protect the country’s budget by providing a stable, last-resort source of finance during periods of fiscal deficit. It is therefore instructive to note that as the country marches towards meeting the MDGs target, the best government can do for now is channel subsidy to the provision of the country’s social needs like agriculture, education and health services and avoid the waste called fuel subsidy.