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

Australia Knights Prince Philip, Sparking National Outrage

Abbott's surprise reintroduction of knights and dames in the country's honors system last year drew criticism that he was out of touch with national sentiment More

SAG Award Boosts 'Birdman' Oscar Hopes

Individual acting Oscars appear to be sewn up: SAG awards went to artists who won Golden Globes: Julianne Moore, Eddie Redmayne, Patricia Arquette, J.K. Simmons More

Katy Perry Lights Way for Super Bowl's Girl Power Moment

Pop star's selection to headline US football championship's halftime show extends NFL's trend of selecting artists who appeal to younger viewers More

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

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Zoo Animals Show Their Artistic Sidesi
X
June Soh
January 23, 2015 10:03 PM
The pursuit of happiness is so important, America's founding fathers put it in the Declaration of Independence. Any zookeeper will tell you animals need enrichment, just like humans do. So painting, and even music, are part of the Smithsonian National Zoo's program to keep the animals happy. VOA’s June Soh met some animal artists at the zoo in Washington. Faith Lapidus narrates.
Video

Video Zoo Animals Show Their Artistic Sides

The pursuit of happiness is so important, America's founding fathers put it in the Declaration of Independence. Any zookeeper will tell you animals need enrichment, just like humans do. So painting, and even music, are part of the Smithsonian National Zoo's program to keep the animals happy. VOA’s June Soh met some animal artists at the zoo in Washington. Faith Lapidus narrates.
Video

Video Progress, Some Areas of Disagreement in Cuba Talks

U.S. and Cuban officials are reporting progress from initial talks in Havana on re-establishing diplomatic ties. U.S. Assistant Secretary of State (for Western Hemisphere Affairs) Roberta Jacobson said while there was agreement on a broad range of issues, there also are some “profound disagreements” between Washington and Havana. VOA State Department correspondent Pam Dockins has the story.
Video

Video Worldwide Photo Workshops Empower Youth

Last September, 20 young adults from South Sudan took part in a National Geographic Photo Camp. They are among hundreds of students from around the world who have learned how to use a camera to tell the stories of the people in their communities through the powerful medium of photography. Three camp participants talked about their experiences recently on a visit to Washington. VOA’s Julie Taboh reports.
Video

Video US, Japan Offer Lessons as Eurozone Launches Huge Stimulus

The Euro currency has fallen sharply after the European Central Bank announced a bigger-than-expected $67 billion-a-month quantitative easing program Thursday - commonly seen as a form of printing new money. Henry Ridgwell reports for VOA from London on whether the move might rescue the eurozone economy -- and what lessons have been learned from similar programs around the world.
Video

Video Nigerian Elections Pose Concern of Potential Conflict in 'Middle Belt'

Nigeria’s north-central state of Kaduna has long been the site of fighting between Muslims and Christians as well as between people of different ethnic groups. As the February elections approach, community and religious leaders are making plans they hope will keep the streets calm after results are announced. Chris Stein reports from the state capital, Kaduna.
Video

Video As Viewership Drops, Obama Puts His Message on YouTube

Ratings reports show President Obama’s State of the Union address this week drew the lowest number of viewers for this annual speech in 15 years. White House officials anticipated this, and the president has decided to take a non-traditional approach to getting his message out. VOA White House correspondent Luis Ramirez reports.
Video

Video S. Korean Businesses Want to End Trade Restrictions With North

Business leaders in South Korea are calling for President Park Geun-hye to ease trade restrictions with North Korea that were put in place in 2010 after the sinking of a South Korean warship.Pro-business groups argue that expanding trade and investment is not only good for business, it is also good for long-term regional peace and security. VOA’s Brian Padden reports.
Video

Video US Marching Bands Grow Into a Show of Their Own

The 2014 Super Bowl halftime show was the most-watched in history - attracting an estimated 115 million viewers. That event featured pop star Bruno Mars. But the halftime show tradition started with marching bands, which still dominate the entertainment at U.S. high school and college American football games. But as Enming Liu reports in this story narrated by Adrianna Zhang, marching bands have grown into a show of their own.

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

All About America

AppleAndroid