Three hours to meeting with labour, Okonjo-Iweala, again, defends subsidy withdrawal

A few hours before the resumption of discussions between the government and organized labour on the vexed issue of removal of subsidy on petrol, the Minister of Finance and Coordinating Minister of the Economic Team of the Federal Government, Dr. Ngozi Okonjo-Iweala, has again risen in defence of government’s action on the issue.

Okonjo-Iweala, in a Status Update message on popular social media, Facebook, said that the withdrawal of subsidy on petrol was in the best interest of Nigerians.

She said that subsidy only benefitted the rich and the corrupt, a sore point in the argument of many who believe that rather than pass the additional burden to Nigerians, the government should rather confront those corruptly enriching themselves through this process.

The meeting between government and labour is scheduled for 6pm today at the Presidential Villa.

Okonjo-Iweala, in the Facebook Status Update with the title “The government cares,” wrote:

“To my fellow Nigerians:

“Many of you have been asking, “Does this government really care about the people? And if so, how can they advocate removing a fuel subsidy programme that is supposed to help the poor?”

“The answer to these questions are:

“1. Yes! The government does care about the people, and

“2. We advocate removing the fuel subsidy precisely because it is not doing what it is supposed to. It is not helping the poor. It is benefiting the rich and the corrupt.

“Put simply, the reform-minded in government are not anti-subsidies. We are anti-subsidies-that-don’t-work.

“For example, just this past November, government reformed the subsidy policy for fertilizer to great success. Over the past decade, inconsistent and incoherent government policy actually led to a decrease in Nigeria’s fertilizer production from 1.2 million tons to a mere 56,000 tons, hardly enough to feed the nation. In response, we instituted the Growth Enhancement Support program (GES).

“GES removed government from procuring and distributing fertilizers and seeds to farmers directly. Although government initially had good intentions by acting as a distributer, its inefficiency got in the way of doing the job well. As a result, it was not helping farmers at all. Reformers thought it best if government left the procurement and distribution to those more resourceful, nimble, and efficient…namely Nigeria’s entrepreneurial citizens themselves.

“GES enabled the private sector to step in and assume the distribution role. Moreover, the financial support built into the GES programme allowed the private distributors to sell fertilizer and seed to ordinary, hard-working farmers at half price. The result was that farmers’ access to fertilizer and seed – the critical ingredients to a productive farm – rose from 11 per cent to 94 per cent. Twenty million farmers are expected to benefit from this programme and rise from a level of subsistence to self-sufficiency.

“The illustration above shows how government doing less resulted in much more for the people. This type of success is exactly what we hope to recreate with removal of the inefficient fuel subsidy and institute in its place the introduction of real subsidies. The real subsidies will come in the form of uninterrupted power supply, better roads, schools, healthcare, and more.

“How do you know that this will happen? You will know because this government is committed to change and transparency. The flow of money coming from the removal of this subsidy will be published for all to see. When the money disbursed doesn’t equal the returns promised, then take issue and let us know.”