As controversies build around the planned removal of fuel subsidy, the Chairman, Centre for Human Rights and Accountability Network, CHRAN, Akwa Ibom State, Otuekong Franklyn Isong tells DAILY POST correspondent in Uyo that corruption was still deep into the system. He went ahead to set an agenda for the incoming administration of Bola Ahmed Tinubu. Excerpts!
Less than three weeks to the exit of President Mohammadu Buhari-led administration, how do you assess the government in the area of petroleum industry?
The President has not done well in the petroleum sector of the economy. He is both the President and the Minister of petroleum and the buck stops at his table. He only appointed a Minister of state who reports to him. He also appointed the GMD of NNPC who reports to him, so what is wrong if we have a Minister of petroleum who will correct all the anomalies in that sector of the economy?
Nigeria is operating a mono-economy on the basis and foundation of petroleum. We have three refineries in the country built decades ago- Kaduna refinery, Port-Harcourt refinery, and Warri refinery but none of these refineries is functional. Every year, we hear of billions of Naira voted out for their Turn Around Maintenance.
It is disheartening that the federal government will keep people who are just employees in those companies doing nothing and at the end, they will be paid. The question is, if this particular sector were to be the private company or private sector of Mr President, would he have employed workers, thousands of them and kept them in the company while they are doing nothing and at the end of the month, pay them salary? The answer is no! But because it is a public sector, you can afford to allow that sector to rot.
If you recall, about three to four months ago, adulterated fuel was imported into this country which damaged a lot of vehicles’ fuel pumps, knocked people’s car engines; I was a victim. Actually the federal government admitted to the importation of adulterated fuel and that was all. Till this moment, no arrest has been made regarding that, and the government did not say any other thing afterwards.
There has been a forth and back argument over fuel subsidy removal, what is your take on that?
In 2014, I was one of those people who protested the fuel subsidy calling it a scam. The then president Goodluck Jonathan wanted to defend it but we opposed it. I see subsidy as a conduit used in syphoning public funds.
For me, the argument about removal of subsidy does not hold water, what holds water is the corruption in that sector and how the sector is being manipulated by the government; the scam there is that people will say they have imported 10 million barrels of petrol while they only imported two and at the end they will be paid for 10 barrels they claimed to have imported.
How can we consume 10 million barrels of petrol in a day? How many litres make one barrel? No statistics to back up their claims, all these are the things sabotaging the fuel subsidy. The people involved in the subsidy have refused to disclose the number of litres that make up a barrel of crude or refined products.
The other time we heard of a ship carrying crude oil in the creeks and before we knew what was happening, they put fire on the ship, and that was the end, nobody was sanctioned. The corruption that is eating the oil sector is the reason nobody (the beneficiaries) is talking about fuel subsidy removal. They don’t want it (subsidy) removed. Subsidy remains a scam until the government is able to publish the names of those getting the subsidy per month or per quarter.
From all these forth and back, it is obvious that the Federal Government is not sincere about tackling the fuel subsidy issue and making our refineries functional.
In an attempt to cushion the impact of fuel subsidy removal, the FG is borrowing $800M to be shared among the poorest of the poor, what is your take on that?
The question is not borrowing; in fact borrowing is not wrong but what did you borrow the money for? The Finance minister, Zainab Ahmed had explained that the $800 million from the World Bank would be distributed as palliative to 10 million households across the country to mitigate the impact of the fuel subsidy removal.
For me this move is a right step in the wrong direction. This loan should be channelled into the construction of capital infrastructure and not to be shared among the supposed poor persons, how can the poorest of the poor be determined.
President Mohammadu Buhari has cattle ranches, can he borrow money to pay his workers? Of course, the answer is no. If the farms are not self-sustaining to pay workers, of course the farms would be shut down. If you borrow money to feed Nigerians, where will you get the money to pay back? If they actually want to distribute it, how do you have the correct data of the poorest of the poor?
During the COVID-19 lockdown, even when school children were at home, they appropriated billions of Naira which they claimed to have used for the feeding of children who were at home, so we don’t want to go through that experience again. The federal government should not be in a hurry to share the money rather they should keep it for the next administration which will set up a crack team that would decide on where to channel the money to.
What is your advice to the incoming administration?
First of all, I’ll advise the present government not to be in a hurry to share the $800 million loan collected from the World Bank. Rather, they should keep it for the next administration which will set up a team that would decide on where to channel the money. Good enough, the incoming President, Bola Tinubu is a seasoned industrialist who may think towards investing the loan in capital projects.
Since the present government has decided to postpone the national population and housing census, it should as well keep the loan ($800 million) meant for the subsidy removal.
In all reality, fuel subsidy has posed a burden on Nigeria’s lean resources and successive governments never made a breakthrough in their attempts to remove it. The budgetary provision of subsidy in the 2023 fiscal year only covered till June which was at the tune of N3.36 trillion.
Now that the subsidy may continue after June, it means that Nigeria will spend about N6.72 trillion in 2023 without taking into consideration the amount gulped since the inception of this administration from 2015. The new government should work towards revamping those moribund refineries.
Government should unbundle the petroleum sector so that private people can come in. Government is not good at doing business; the petroleum sector should be unbundled. If the sector is made open for any state government to come in, there will be a remarkable change in the sector. If the states are allowed to build refineries and the nine oil producing states of the Niger Delta, have refineries, it will reduce the pressure of subsidy on the economy.
Also, our legislation is too rigid. We have over 62 items in the exclusive list and some of the items therein should be moved to the concurrent list. Government should sell-off these three moribund refineries so that they will be privately run.
Government-owned industries are always abused and poorly managed. Look at Oku Iboku Paper Mill, Alscon in Ikot Abasi, Ajaokuta Mill, they are all moribund because they are owned by the federal government. The best thing is to privatise these companies and make friendly laws; we won’t have these issues again because there will be competition.
Dangote is building a refinery, it will work because it is privately owned. If any other person builds his own, it will also work, so let it be on the priority list of the incoming government to privatise these companies so that there will be a competition.
Also, the government should issue licences to modular refinery operators. Crude should be sold to them at a domestic rate and not at the international rate as done before. If we could remember that when the refineries were functional, many modular refinery operators were disgruntled and decided to back-out because the crude was given to them at the international market price. The option for the government today is a partial price deregulation over a period, with a price modulation mechanism.
The President-elect should have a team of advisers who will give him sincere advice and he should have the political will to implement such advice, otherwise we will miss the outgoing government and I’m sure you know what that means.
In all, subsidy is not wrong but its usage has become a problem to Nigeria’s economy perhaps because of lack of transparency and accountability.