by Osae-Brown Anthony
The Nigerian Labour Congress (NLC) is ready for a fight on the removal of fuel subsidy again. My take is that they are once again taking on the wrong fight. I do not think there is any economic justification for a country to dish out N1.3 trillion (USD 9 billion) on a yearly basis to 77 companies that employ less than 5,000 Nigerians.
This money is dished out despite the fact that we still have no accurate figures on the actual amount of petrol consumed on a yearly basis in Nigeria. The last banking crisis was largely caused by the number of banks that were exposed to fuel importers. The truth is that fuel subsidy is not only a waste of money but also fertile ground for corruption in high places.
Also no investor will build a single refinery if the government is going to tell him or her how much he will sell the refined fuel. So as long as there is a price cap on refined fuel, there will be no new refineries in the country.
So what should NLC be asking for? Sell the refineries. Since NLC fought for the refineries to be taken over from Dangote and Co by NNPC, the refineries have remained dead, despite billions spent on so called turnaround maintenance (TAM) another term for Turnaround Money. It is surprising the NLC has not raised questions about the fact that the billions spent on TAM have not revived the refineries. The truth is that the refineries will never work as long there is easy money to be made from just importing fuel and get paid billions. Everyone will go for easy money when there is an opportunity.
NLC should ask for a clear fund for critical infrastructure, roads, railways, schools, and health centres in return for the removal of fuel subsidy. The money saved under the subsidy regime should not be hidden in any overall budget expenditure. A special fund like the PTF of Abacha days should be set up and the savings giving to it to invest in specific infrastructure over say four years. This fund should be given a clear mandate like say, how many kilometres of roads, rails, and waterways should be delivered. How many schools and health centres should be rebuilt and how many power stations should be built to deliver specific megawatts of electricity. This fund can also act as intervention fund that can be accessed by the by the private sector and banks.
Finally, NLC should demand for a reduction in the bloated government structure. Over 40 ministries and 800 parastatals consuming over 70 per cent of the nation’s revenues is recipe for disaster. The NLC will not fight against this waste because they are direct beneficiaries. But as long as the public sector remains over weight in the consumption of Nigeria’s wealth, the private sector that should be the engine room of growth and employment will remain emasculated. The NLC should save Nigeria first before it saves itself.