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SURE Fund Falls by N 700 billion

By on March 6, 2012

The funds available for the Subsidy Reinvestment and Empowerment (SURE) programme has fallen from N 1.134 trillion to N 426 billion, a reduction of approximately N 700 billion. The decrease is as a result of government’s inability to remove the fuel subsidy in its entirety.

The Minister of State for Finance, Dr. Yerima Ngama, disclosed the reason for the dramatic reduction to media correspondents at the State House yesterday.

He said, “When the Subsidy Re-investment Programme was drawn up, the projects that were selected to be implemented were based on the assumption that we are going to have complete deregulation of the downstream petroleum sector and the announcement was made for the complete deregulation of the price of petrol, which went to as high as N141 and that was taken for a fully deregulated price.

“But after engagement with the labour unions, deregulation was reversed and we have a partial deregulation that pegged the price of petrol at N97. It means that this is a partial or more or less 37 per cent or 38 per cent liberalisation of the price, and that implies that we cannot have the full re-investment fund because we have partial deregulation; unless we are going to end up with less than the projected re-investment fund.”

“If you look at the SURE-P document, the estimate of the re-investment fund was N1.134tn, but with the partial deregulation, the computed total re-investment fund per annum came to N426bn, and that is what is available to the Federal Government, the state governments and the local governments.

“The share of the Federal Government came down from N478bn to N180bn. So, the document you have seen was based on an expectation of N478bn every year for four years; but now that we are getting N180bn every year for four years, we have to prioritise.”

The government has prioritized maternal and child health, public works programme to generate employment for the youth, and mass transit scheme and the technical skill acquisition to be programmes in the lead to receive SURE funds.