From the tone of the debate on the deregulation of the downstream sector of the petroleum subsector, and the concomitant withdrawal of fuel subsidy, one would think that the Federal Government is the sole payer of the subsidy that is said to run into about N1.3 trillion per annum. That mistaken assumption would also lead one to believe that with the planned removal of the contentious subsidy, the Federal Government will also be the sole recipient of the savings to be made therefrom.
This viewpoint accounts for the demands being made on the Federal Government to defend the proposal, by stating what it intends to do with the gains from the subsidy withdrawal. Officials of the Federal Government, including the Minsters of Finance and Information, have waged a campaign, seeking to persuade and appeal to Nigerians that the Federal Government means well. They have also gone ahead to list projects and programmes on which the Federal Government will spend the subsidy funds.
But this is where the curiosity begins. When it is convenient, advocates are at their best preaching adherence to the tenets of federalism, the most common variety being fiscal federalism. What is obvious is that all three tiers of government—Federal, State, and Local—contribute to the amount that is paid out as fuel subsidy yearly.? Of the annual N1.3 trillion subsidy, the Federal Government is responsible for N633 billion, N349 billio for state governments, N269 billion for local governments, and N49 billion to Special Transfers to the Judiciary and national assembly as provided for in the Appropriationa Act.
Governor Sule Lamido, at a recent forum in Dutse, capital of Jigawa State, gave flesh to the figures by reducing them to his own state level.. According to him, Jigawa State is levied about N45billion to N50billion annually as fuel subsidy. “The choice is ours,” he said, “I stand for deregulation because I will get extra N50 billion annually and in the next three years I will get N150 billion. If I have that, I will transform Jigawa into a modern state.”
That voice has been the most resonant among members of the Governors’ Forum, although one should also acknowledge that the Niger State Governor, Dr Aliyu Babangida, has also spoken forcefully in favour of deregulation. Yet, that is not enough. If opponents of deregulation knew well enough, they would recognise that this is not a matter on which to take the Federal Government alone to task. It would a totally new ball game if the various activist groups, including the Nigeria Labour Congress, and the Nigerian Bar Association, decentralized their agitation and began asking states and local governments in their domain what exactly they would achieve with the subsidy which is being withdrawn.
I am not, here, delving into the merits, or demerits, of deregulation and the associated subsidy withdrawal. Rather, my point is that in stoking the fires of the arguments on the issue, we are only cooking one part of the pot, while the other part remains unheated. The food in the pot will either take a much longer time to cook, or the part that receives little or no heat will be uncooked. If the desire is to cook everything, then that portion that receives all the heat might get burnt. Let us think about this deeply: if all the opinion leaders and agitators narrowed their arguments to the immediate locality, we might begin to get a more holistic picture of what the subsidy removal might achieve for the economy. In that sense, we might be better able gauge whether we should insist on the retention of the subsidy, or on the subsidy been removal, since the projected benefits might be clearer to all.
Indeed, this approach, in my view, will make it a lot easier for us to hold our respective tiers of government to account. But when every one is taking a potshot at the Federal Government, and President Goodluck Jonathan, we lose a unique opportunity to broadly take all tiers of government to task. This, therefore, provides a canopy for others to hide, not just now as the debate is on-going, but later in the future when the subsidy removal policy is implemented. To stretch the argument further, we have 774 local councils in the country. How many local governments have articulated what they would do with the savings that will accrue to them when fuel subsidy is removed? Part of the reason for the gross underdevelopment of the country arises from the failure of local governments to? fulfil their responsibilities as enshrined in the Fourth Schedule to the 1999 Constitution.
One is not unaware of the fact that local governments are not doing well because they have been hijacked by state governments, which release only a pittance to the councils. That problem cannot be solved overnight. Yet, the issue on which agitators and activists can demand answers overnight should be addressed to state governments. Let state governments tell Nigerians, in particular their immediate constituents, what they intend to do with their contributions to the subsidy once these become savings. I am sure that a huge debate will explode in most states because the immediate answer will be that they will spend the money to pay salaries.
That shouldn’t be the case. The money, such as the Federal Government has articulated, must go into developmental programmes and projects. The Federal Government has since released what it calls its SURE PROGRAM, that is, SUBSIDY REINVESTMENT AND EMPOWERMENT PROGRAM. Let me quickly note that I do not know whether those who scripted it were absentminded in using the American spelling of program, rather than the British spelling, which is programme. But that does not in any way detract from the substance of the SURE programme, which is intended to channel the Federal Government’s own share of the subsidy resources into a combination of programmes to stimulate the economy, alleviate poverty, and provide a safety net for vulnerable groups. The key areas of intervention are agriculture, education, health, ICT, power, water supply, roads , rail transportation, as well as public works and youth employment. It is all the more interesting that the Federal Government has proposed a structure, a Board, to oversee the implementation of the SURE Programme.
As Governor Lamido said at the forum referred to above, “The governors are united irrespective of party differences on the fact that we need more money in our states, so that we can also increase the quality of service to our people.”? Yet, no state or local government has come up with a programme as comprehensive as that released by the Federal Government. Activists and agitators, who have seized the national platform, have failed to equally demand details of the “quality service to our people” at the state level, and by extension the local government level. That is the crucial missing link in the on-going heated debate over the planned removal of fuel subsidy.
I am of the strong feeling that unless we adopt true federalism in tasking our tiers of government (in this case, the matter of deregulation and fuel subsidy removal), we will continually focus our critical energies on just the Federal Government, and thereby lose an opportunity to interrogate other tiers. This is not withstanding the fact that the Federal Government gets a disproportionate share of the country’s revenue. We must focus on recipients of the remainder and hold them to account. If we did this, our democracy would be much sweeter, and the gains more bountiful.
Omafume is an Abuja based public opinion analyst