State Governors Push for Total Subsidy Removal

The Coordinating Minister of the economy and Minister of Finance, Dr. Okonjo-Iweala has decried the depletion of the Excess Crude Account and blamed the development on the Governors of the States.

The minister spoke at a Civil Society forum in Abuja attended by senior civil servants including Minister of State for Health, Dr. Mohammed Pate; the Director-General, Budget Office of the Federation, Dr. Bright Okogu; the immediate past Chairman, Federal Inland Revenue Service, Mrs. Ifueko Omogui-Okauru; and the Chairman, Nigerian Electricity Regulatory Commission, Dr. Sam Amadi.

She said, “The ECA and its successor, the Sovereign Wealth Fund, are very important, but we have the state governors saying no, we will only allow $1bn. In fact, we managed to get that, and now, they said it is illegal; and so, the country is not able to save in the ECA and we have left today in that account only about $3.6bn.

“Every month, because they say it is illegal, we have been dipping hands into it. Instead of moving that money into the sovereign wealth account, it is being shared until it is almost at the bottom.

“What that means is that should the price of oil drop today, we have no cushion because $3.6bn for this economy is not enough to take us to any length of time, and that was what I told them at the governors’ Forum during the National Economic Council meeting the last time.

“I told them that their argument about the legality or illegality is a mute point because we have spent almost all the money.”

The minister indicated that the only way to appease the governors may be to totally remove the fuel subsidy. The governors have been the primary champions and cause of the fuel subsidy removal in part and seem to be gunning for its total removal.

She added, “I subscribe to the subsidy phase out and I will tell you why. Nigerians have refused to acknowledge the fact that we are subsidizing neighboring countries like Niger and Chad, and we are allowing money to get to some corrupt people; but of course, there are genuine importers.

“So, on the basis of the fiscal aspect of it and corruption, we found out that this subsidy cannot be sustained by the country, even Ghana that has just found oil has phased out the payment of subsidy because it found out that it could not sustain it. So, we must find other ways of solving this problem and cushioning this economy because we are still paying that subsidy, only that it is now partial.”