Fuel subsidy and waste in budgeting (Editorial Board, Punch Newspaper)

January 5, 2012 by Editorial Board, Punch Newspaper

ALTHOUGH President Goodluck Jonathan would want Nigerians to believe that his government will collapse if the contentious issue of subsidy on imported refined petroleum products is not resolved on his own terms, available evidence shows that the government’s extravagant and wasteful lifestyle constitutes a greater threat to the economic survival of the country. Starting from January 1, 2012, the Federal Government has stopped subsidising Premium Motor Spirit and jacked up the price from N65 per litre to a minimum of N140. In some states, retailers dispense it at N160 per litre and there is already, widespread anger and resentment against the policy across the country.

Jonathan believes that the withdrawal of subsidies – which means paying more for imported refined petroleum products – will free N1.3 trillion (which the government said it spent to subsidise the products in 2011) to be ploughed into massive infrastructure development and thus stimulate economic growth. This is the sacrifice the President is asking Nigerians to make for the overall interest of the country. But while it is calling on Nigerians to sacrifice for a better future, the government itself is not willing to curb its own extravagance and waste, as components in the 2012 budget proposal currently awaiting the approval of the National Assembly have shown.

In her breakdown of the budget, the Minister of Finance and Coordinator of the Economic Team, Ngozi Okonjo-Iweala, was quoted as saying, “This is a serious budget with a serious purpose which will be implemented with a serious approach. Nigerians are tired of talk; that is why the budget is all about action in the areas that matter to Nigerians.” Unfortunately, some of the items in the budget do not portray the government as “serious” in its “purpose” and “approach” as far as the extravagant spending pattern of government is concerned. Details of the N4.7 trillion budget reek of waste.

For instance, how can a government that claims to be on the brink of an inevitable collapse – if the fuel subsidy is not removed – budget N992.57 million for “feeding” in the Presidency in the coming year? A breakdown of the outrageous feeding budget shows that N45 million is earmarked for the purchase of kitchen and household equipment, while N293 million will be used for “refreshment”. The State House Clinic in the Presidency will also have N1.2 billion to play around with for the improvement of facilities, including a delivery room and dog training pitch! Imagine the good that could be done with that bucket of money. This is a gratuitous display of wealth in a country where poverty is endemic. In the United States, reputedly the richest country in the world, the president reportedly pays for most of his and his family’s dry-cleaning, meals and drinks. Barack Obama can only expect free meals at official dinners, especially when hosting foreign dignitaries.

In the same budget, a hefty sum of N11.25 billion has been proposed for foreign trips by the various Federal Government ministries, agencies, departments and parastatals. At the last Commonwealth Heads of Government Meeting in Australia, Nigeria was said to have gone with the largest delegation. Not even the Head of the Commonwealth, the Queen of England, had a delegation nearly as large as our President’s.

Besides, while the Queen travelled in a commercial aircraft, the British Airways, our President, went with aircraft from the presidential fleet, the number of which was increased when it placed orders for three additional aircraft last year. In this budget proposal, another sum of N1.9 billion has been provided to further enrich the presidential fleet. The British Prime Minister, David Cameron, during his last trip to the USA, travelled on a commercial flight and thereafter, joined a train. Why can’t a poor country like ours emulate that?

Other areas of waste and extravagance can be noticed in the provision of N1.5 billion to be spent on the maintenance of guest houses for some legislators, a vote of N280 million for bullet-proof cars for The Presidency and a proposal to spend N75 million on extension of the Presidential Villa gates. It is also estimated that the renovation of the State House, Marina and Dodan Barracks, both in Lagos, will cost over N530 million.

Nigeria already has a reputation as a country with the highest paid political office holders in the world, where the Senate President, according to figures published by eminent lawyer, Prof. Itse Sagay, earns about N88 million a month in salary and allowances. Since he came up with the figures of the “jumbo” pay of federal lawmakers, they have not been disputed.

The trend the world over, even in countries that are rich and industrially advanced, is for governments to cut costs. In Britain, cost-cutting has even gone as far as to affect the cost of children’s education and the adjustment of the retirement age for public officials. Even when the people had protested what they deemed to be taking cost-cutting to an extreme level, they have taken solace in their belief that the government is not being unduly extravagant. If the Federal Government is sincere as the British example shows, many Nigerians would trust the government and support its actions and policies, including belt-tightening measures.

The cost of maintaining public officials has skyrocketed over the past decade and this has to be stopped. The Jonathan administration should break the spending addiction and waste. Nigerians want to hear of progress in curbing waste in official travels, reductions in official vehicle fleets and an end to the outrageous lifestyles of public officials. But a situation where even the existence of the petroleum subsidy is doubted, many Nigerians will believe that government is merely taxing them to subsidise the life of ease and luxury of public officials.



4 thoughts on “Fuel subsidy and waste in budgeting (Editorial Board, Punch Newspaper)

  1. lt is a pity that we are in country where living a good life becomes unexplainable amidst plenty.Most of annual budgets are spent on flimsy things that has no direct bearing to the life of the people which the politicians claimed to be represented.You could imagin Nigerian delegation to the meeting of commonwealth head of government recently head in Australia.We are told that ours was the largest even the British delegation was not as big as our delegation.My perception about our democracy is ,this present

    democracy may not pay us why bcos our national assembly are so corrupt to the extent that they apportioned salaries and oth
    er fringe benefits to themselves .Who does know the senate president and his antecedent when he was in the millitary and that speaks volume of to expect now and in some foreseeable future.

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