News / Africa

    Nigerian President Defends Cutting $7.5 Billion Fuel Subsidy

    Nigeria says it is ending a $7.5 billion consumer fuel subsidy because it can better spend that money on infrastructure and social programs. 

    Nigerian President Goodluck Jonathan is moving to end a long-standing subsidy that keeps petroleum prices here an artificially low 40 cents per liter.

    Raising consumer prices is never popular, but the president enjoys the support of foreign donors, many bankers and Nigeria's powerful state governors.  He says the action is vital to the country's economic future because continuing the subsidy means that Africa's largest oil producer will find itself importing fuel from Cameroon, Ghana, Chad and Niger.

    “In the quest for a better society, we may have to take decisions which would, at inception, be unpleasant in some cases. But we must face the reality, be honest with ourselves and ensure that we do our best for our country at all times,” said Jonathan.

    Representative Dakuku Peterside chairs the House Committee on Petroleum Resources.  He says the money saved from the subsidy will benefit Nigerians by increasing spending on roads, health care and power generation.

    “It makes business sense to me that the subsidies are removed. It might not look popular today, but over time our people will appreciate that it makes a lot of economic sense. If you look at the statistics, ultimately it will benefit the common man," noted Peterside.

    Proponents of dropping the subsidy say it mostly benefits the small group of fuel traders to whom it is paid. Because Nigeria refines less than one-third of the petroleum it consumes, those dealers control the importation of fuel to keep prices at the pump at 65 Naira per liter.

    Borno State Senator Mohammed Ali Ndume says profiteering by fuel traders must be stopped, but not at the expense of Nigerian consumers.

    “I agree with the government that right now it is a window of corruption that benefits the cabal, as they call it.  But we are saying government should be responsible.  Get those people and deal with them.  You can't just transfer responsibility of corruption and mismanagement by a few individuals to Nigerians," said Ndume. "That is wrong."

    Economist Prince Ohini says removing the fuel subsidy is right in theory, but here is wrong in practice because of Nigeria's long history of corruption and mismanagement.

    “The long-term effect of it is going to be beneficial for me and you as citizens of this country. But using Nigeria as a case study I will not support it because our government is not sincere.  When you remove this money, who will use it?  Removing it is enriching the bank accounts of those at the top," Ohini said. "And leaving the ordinary ones to suffer.”

    At a time when trade unions have just won a hard-fought increase in the minimum wage, businessman Andrew Adebisi says ending the fuel subsidy will push up consumer prices across the board, erasing the gains of higher wages.

    “If the fuel subsidy is removed, it is going to be of great effect to my business and every other business person around the nation," Adebisi said. "Definitely the fuel of transportation will increase.  And, if the fuel of moving goods from one point to another is increased, you will definitely have an increase in every other commodity around the country.  And, as a result, business will become very expensive.”

    Teacher Nelson Aguda says Nigerians would be more willing to live without subsidized fuel if they felt their government was doing more to help them.

    “Since I was born in this country, I have never seen any price that has gone up coming down.  It can never be maintained in this country because our leaders are very, very greedy.  I use fuel to generate my generator, my lights.  And, when such thing is removed it means that the liter of fuel might go to 150 [Naira].  How then do I get light with my family?” he asked.

    Senator Ndume says the fuel subsidy is one of the few things that benefit all Nigerians, especially in places where the federal government has little impact on people's lives.

    “There are some villages where there are no hospitals, there are no roads, there is no police, no government presence.  The only government presence is that in such small villages you have small grinding machines that grind their corn, which uses the petroleum.  They have motorcycles that transport them to the urban areas.  There are pick-up vehicles that take their farm products from the villages," Ndume explained. "It is the only thing that the masses are benefiting.”

    President Jonathan says he will not back down from ending the fuel subsidy.  He is moving to improve the public perception of the decision by shifting responsibility for the communication strategy from the finance ministry to the petroleum resources ministry.

    You May Like

    Clinton, Trump and the 'Woman’s Card'

    Ask supporters of Democratic front-runner in US presidential campaign, and they’ll tell you Republican presidential candidate is playing a dangerous hand

    Russian Censorship Group Seeks Chinese Help to Better Control Internet

    At recent Safe Internet League forum in Moscow, speakers from both nations underscored desire for authorities to further limit and control information online

    Video Makeshift Pakistani School Helps Slum Kids

    Free classes in Islamabad park serve a few of the country’s nearly 25 million out-of-school youths; NGO cites ‘education crisis’

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    By the Numbers

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Turkish Kurd Islamist Rally Stokes Tensionsi
    X
    April 29, 2016 12:28 AM
    In a sign of the rising power of Islamists in Turkey, more than 100,000 people recently gathered in Diyarbakir, the main city in Turkey’s predominantly Kurdish southeast, to mark the birthday of the Prophet Muhammad. The gathering highlighted tensions with the pro-secular Kurdish nationalist movement. Dorian Jones reports from Diyarbakir.
    Video

    Video Turkish Kurd Islamist Rally Stokes Tensions

    In a sign of the rising power of Islamists in Turkey, more than 100,000 people recently gathered in Diyarbakir, the main city in Turkey’s predominantly Kurdish southeast, to mark the birthday of the Prophet Muhammad. The gathering highlighted tensions with the pro-secular Kurdish nationalist movement. Dorian Jones reports from Diyarbakir.
    Video

    Video Pakistani School Helps Slum Kids

    Master Mohammad Ayub runs a makeshift school in a public park in Islamabad. Thousands of poor children have benefited from his services over the years, but, as VOA's Ayesha Tanzeem reports, roughly 25 million school-age youths don't get an education in Pakistan.
    Video

    Video Florida’s Weeki Wachee ‘Mermaids’ Make a Splash

    Since 1947, ‘mermaids’ have fascinated tourists at central Florida’s Weeki Wachee Springs State Park with their fluid movements and synchronized ballet. Performing underwater has its challenges, including cold temperatures and a steady current, as VOA’s Lin Yang and Joseph Mok report.
    Video

    Video Somali, African Union Forces Face Resurgent Al-Shabab

    The Islamic State terror group claimed its first attack in Somalia earlier this week, though the claim has not been verified by forces on the ground. Meanwhile, al-Shabab militants have stepped up their attacks as Somalia prepares for elections later this year. Henry Ridgwell reports there are growing frustrations among Somalia’s Western backers over the country’s slow progress in forming its own armed forces to establish security after 25 years of chaos.
    Video

    Video Bangladesh Targeted Killings Spark Wave of Fear

    People in Bangladesh’s capital are expressing deep concern over the brutal attacks that have killed secular blogger, and most recently a gay rights activist and an employee of the U.S. embassy. Xulhaz Mannan, an embassy protocol officer and the editor of the country’s only gay and transgender magazine Roopban; and his friend Mehboob Rabbi Tanoy, a gay rights activist, were hacked to death by five attackers in Mannan’s Dhaka home earlier this month.
    Video

    Video Documentary Tells Tale of Chernobyl Returnees

    Ukraine this week is marking the 30th anniversary of the world's worst nuclear accident, at the Chernobyl nuclear power plant. Soviet officials at first said little about the accident, but later evacuated a 2,600-square-kilometer "exclusion zone." Some people, though, came back. American directors Holly Morris and Anne Bogart created a documentary about this faithful and brave community. VOA's Tetiana Kharchenko reports from New York on "The Babushkas of Chernobyl." Carol Pearson narrates.
    Video

    Video Nigerians Feel Bite of Buhari Economic Policy

    Despite the global drop in the price of oil, Nigerian President Muhammadu Buhari has refused to allow the country's currency to devalue, leading to a shortage of foreign exchange. Chris Stein reports from Lagos businessmen and consumers are feeling the impact as the country deals with a severe fuel shortage.
    Video

    Video  Return to the Wild

    There’s a growing trend in the United States to let old or underused golf courses revert back to nature. But as Erika Celeste reports from one parcel in Grafton, Ohio, converting 39 hectares of land back to green space is a lot more complicated than just not mowing the fairway.
    Video

    Video West Urges Unity in Libya as Migrant Numbers Soar

    The Italian government says a NATO-led mission aimed at stemming the flow of migrants from Libya to Europe could be up and running by July. There are concerns that the number of migrants could soar as the route through Greece and the Balkans remains blocked. Western powers say the political chaos in Libya is being exploited by people smugglers — and they are pressuring rival groups to come together under the new unity government. VOA's Henry Ridgwell reports.
    Video

    Video Russia’s TV Rain Swims Against Tide in Sea of Kremlin Propaganda

    Russia’s media freedoms have been gradually eroded under President Vladimir Putin as his government has increased state ownership, influence, and restrictions on critical reporting. Television, where most Russians get their news, has been the main target and is now almost completely state controlled. But in the Russian capital, TV Rain stands out as an island in a sea of Kremlin propaganda.

    Special Report

    Adrift The Invisible African Diaspora