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| Minister of Information, Mr. Labaran Maku |
IS the government not deceiving itself by its determination to remove subsidy on fuel, having refused to build refineries?
We did not refuse to build refineries. We built four-two in Port Harcourt, one in Warri and one in Kaduna. The government built the refineries to the exclusion of other persons believing that it would do the business of refining fuel in Nigeria. But it did not work. It did not also work in aviation, shipping and other areas. That is why today we are saying let us have a comprehensive review of things that did not work and do them in a new way so they will begin to work. Middlemen were given contracts to turn around refineries but they did not turn them around because they did not know anything about them. So the President has now handed them over to those who built them to at least turn them around. In the next eighteen months of rehabilitation of the refineries by the original builders, the refineries will return to full scale capacities. The government will even build additional three.
We now know that the way to ameliorate the cost of fuel is to refine at home. We cannot refine at home successfully if we continue to have a mechanical price on the price of fuel. The thing we are targeting, like other countries are doing, is to open up the sector, increase government participation but complemented by strong competition. That way, we will increase capacity to refine and export refined products. The mechanical pricing system has also enabled sharp practices. Everywhere we had tried deregulation it worked and we believe it will work in the downstream sector. If anybody has an alternative of how we can handle it, let him present it. What we see is a lot of anger for people are not happy and that is legitimate.
What is the justification of the Federal Government budgetary allocation of over N992bn to security while agriculture and housing, which can generate employment, are neglected?
On security, the N992bn security provision in the budget is for three ministries-defence, police and interior. Security costs a lot. Look at what America has been spending to sustain the war against terrorism. It is not easy option. We deploy military troops and the Police to give the citizens confidence, contain the activities of Boko Haram and hunt for them. But at the same time, it is through intelligence that we would burst their plans targeted against innocent Nigerians. We have invested more on intelligence by deploying new intelligence system and technology to monitor the activities of the group. The President has set up a security framework throughout ECOWAS where heads of states and their police chiefs will coordinate joint operation to stem cross-border crimes. We are also going out of the country to establish units in surrounding countries to monitor the influx of the group in and out of the Nigeria. All the money that we are spending on militancy and Boko Haram is money we would have spend on agriculture, infrastructure and power to grow Nigeria.
We have made progress but it has been mitigated by lack of far-sighted policies in terms of running the economy. The Indigenisation Decree, which we clapped hands for then, in retrospect was a mistake because it drove away technology and investment from the country. Whereas other countries such as the Asian Tigers remained stable in their policies. All these policies were lack of foresight.
There are rational people in government. So let us not think that since we are in government we have no sense of rationality. We know the priorities and all the problems in the sectors. We are moving agriculture to real commercial production rather than giving fertiliser subsidy to people who share it and nothing goes to the farmers. The government has set aside N450bn for agriculture outside the land budget. On power, we are committed from 2012 to bringing some of the power projects into production. This current administration had finished the plan for the Mambilla Hydro Electric Power Plant which will be completed before the tenure of the administration ends. It would generate about 2,600 mega watts. Part of the reasons we don’t have a stable power is not just on generation but because the transmission infrastructure is weak. We are changing that in all part of the country. New transmission lines, new sub-station virtually everywhere. Work is going on in this regard. I know that Nigeria is angry when it comes to power and their anger is legitimate. We have a four year mandate to run the country, our plans are stable and we are working to ensure that we deliver on our promises.
Are Nigerians not being made to pay for the inefficiency of the administration by the insistence on fuel subsidy removal?
If we look at the downstream sector, we have not been able to get any persuasive argument that we can run it the way we are running it now and that we will succeed. Let us also look at the industry that we are trying to grow. What policy will make it grow, what policy will strengthen it and what policy will expand it and create opportunities for young persons who are in school? Are we content in selling crude oil as a nation in perpetuity as a nation until it finishes because the reserves we have now will exhaust in the next 30 to 40 years.
Are we content in going on this path until we have nothing left and we would say we had an oil industry? These are the issues before us. The subsidy in itself has only worked to block other developments in a system that government has controlled. And so what government has proposed is let us take this subsidy because it has made development in this sector foreclosed, nobody can build a new refinery, nobody can advance the system and nobody can add value to the crude oil. So the European nations become the beneficiaries of our crude oil because they are the one generating jobs from it and taking the value from it. As a nation, are we content with this and can we continue like this forever? Now if we continue what is the future for the industry and the country? This is really the point.
On the cartel and the inefficiency, government has really not succeeded running anything like business. I have yet to point out any sector from that period to now that has succeeded as a commercial venture in the hand of government. And it is not only in Nigeria. That is why the Chinese are today running its country on the basis of a deregulated economy where private capital and resources have developed their economy faster than anything they tried in 1949 to 1978. It did not work in Russia and some other countries.
How would you react to the observation that this government is not ready to fight corruption?
The issue of corruption is also because of government’s control of the sector. You would not go to telecoms now and find the corruption of NlTEL there unless the people who set them up are crazy. They are running a different system and succeeding. I know that Nigerians are generally emotional about the fact that this is the only subsidy we have and the government is taking it away. The government is not taking it away but only transferring the subsidy because it wants to deregulate the sector and administer it on people. The money derived from the subsidy removal will go into the Federation Account and shared among the tiers of government. We have decided to put whatever will come from the subsidy into a specific account so that Nigerians will know that we are administering it on them. We are not going to throw the money into the Atlantic or burn it. The thing is, if we do not help to develop this sector our children will be in jeopardy. It is an economic strategy of developing a system that has not worked after 52 years. If there are alternatives, we will continue to listen but the truth of the matter is that we are common stakeholders.
But other nations subsidise petroleum and other products?
Most oil-producing countries really do not subsidise fuel apart from countries like Libya, Saudi Arabia that have it in excess and can decide to administer it freely on their people. But our country has huge population and what we have now, if we do not plan it carefully, we are going to be in problem. One way of tackling corruption is to deregulate the system and to desegregate and render it in a way that the Nigerian National Petroleum Corporation no longer has the authority to administer subsidy on anything. That way nobody will go to refine fuel and go to the NNPC to demand a balance. It is because of that process of government control that worsens the system. We had taken all these into account and felt that this is one way of tackling the problem in a way that we will get out of the woods. The government is even building more refineries in addition to ensuring that existing ones which had been mismanaged for decades are performing at full capacity.
As we build our own refineries in the next two or three years, the private sector that have licences for 20 will also open up their own industry. And all together the economy will be growing at a higher rate than this inept government control which has not helped the country. China deregulated but did not devalue and as a result it kept its currency strong. In capital goods, they kept building their factories until they reached a level where they became industrialised.
I remember when the President was interviewed when he clocked 100 days in office, he said he had four years to run the government and that people should not judge him on the basis of seven months. Let us wait and see. (Credit: Punch)
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