Tuesday, November 22, 2011

Removing petrol subsidies in Nigeria is senseless - by Kaanayo Nwachukwu

Before anyone accuses me of being, to a great extent, responsible for making Goodluck Jonathan president of Nigeria because of the roles I and some of my friends played before, during and after his election, let me say right off the bat that his plan to remove fuel subsidies effective from 2012, is wrong, senseless and ill-thought out.

The government's argument that Nigeria is the only place on Earth where life is still being subsidized is a very big fat lie. Subsidies exist in one form or the other in many countries.

The United States pays around $20 billion per annum to farmers in direct subsidies as farm income stabilisation. For every dollar an American farmer earns, 62 cents come from some form of government subsidy. The estimated total subsidies to US farmers in 2009 from all levels of government were $180.8 billion. The Common Agricultural Policy (CAP), a system of European Union subsidies, represented 48 percent of the EU’s budget of €49.8 billion in 2006. In 2010, the EU spent €57 billion on agricultural development, €39 billion of which was spent on direct subsidies. China has several export subsidies.

So, the whole talk about how much subsidies cost the government of Nigeria is simply bunkum or hogwash, for lack of better words. The claim by the de-subsidisation lobbyists that petrol is cheapest in the world in Nigeria is untrue. Given Nigeria's per capita income, at N65 per litre, petrol is actually not cheap. In the UAE and Saudi Arabia, where per capita income is several times higher than what we have in Nigeria, a litre of petrol sells for around 1AED (N45) and SRO 0.45 (N18) respectively. In these countries, the citizens additionally enjoy their God-given natural wealth in several other ways. As one of the largest oil producing and exporting countries in the world, in which way has the ordinary Nigerian felt the impact of the wealth crude oil has brought and still brings to his or her country?

All the government's talk about how much it costs it to subsidize petrol for Nigerians is akin to moaning about how much you spend to keep your children healthy and happy.

Yet, our legislooters and executhieves lack no billions of dollars they can stash away in private bank accounts in the West.

Kaanayo Nwachukwu is a Speaker, Commentator, and Writer. He is the author of the highly acclaimed memoir, "A Dream of Canada: An Incredible Story of Struggle and Overcoming."

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