President Muhammadu Buhari has explained his reason for rescinding the planned removal of fuel subsidy.
He stated the West mounting the pressure is also sustaining its markets through fuel subsidies.
Buhari, who disclosed this in an interview with Bloomberg published on Tuesday, June 21, 2022, also explained that with ongoing efforts at boosting local refining, especially through private sector involvement, the issues around petrol subsidy would be salvaged.
The President explained the administration was almost removing the subsidy in 2021 but after inputs from industry experts and other developments this year, the initial call for petrol subsidy removal became unadvisable.
He also noted the advice for the administration to unify exchange rates would be more profitable when domestic production of commodities, both in the oil and agriculture sector, had been optimised.
“Most western countries are today implementing fuel subsidies. Why would we remove ours now? What is good for the goose is good for the gander.
“What our western allies are learning the hard way is what looks good on paper and the human consequences are two different things. My government set in motion plans to remove the subsidy late last year. After further consultation with stakeholders, and as events unfolded this year, such a move became increasingly untenable.
“Boosting internal production for refined products shall also help. Capacity is due to step up markedly later this year and next, as private players and modular refineries (Dangote Refinery, BUA Group Refinery, Waltersmith Refinery) come on board.
“The exchange rate is still susceptible to external shocks that can suddenly and severely affect Nigerian citizens. As we step up domestic production – both in fuel (enabled by PIA) and food (agricultural policies) – the inflationary threat shall diminish, and we can move toward unification,” he said.
On why increasing taxes in the country might not be as easy as they seem, Buhari said 80% of those to be taxed are in the informal sector, making it difficult.
He noted that other initiatives are being introduced to translate the country’s population advantage to national revenue.
“Though we have the largest economy in Africa, it is true that translating that wealth into revenue generation is challenging.
“We raised VAT in 2020, and the IMF wanted us to raise it further, but this is a complex issue that cannot be addressed by tax hikes alone. Around 80% of Nigerians work in the so-called informal economy – a situation exacerbated by the pandemic. It is difficult to tax the informally employed, and no country has yet found an adequate solution.
“Still, we are striving to find one, including the roll out of a national ID card which has grown from 7 million in 2015 to between 90-100 million today – including a tax code and, at the same time combined with access to various government services.
“In 2016 I launched the Presidential Enabling Business Environment Council (PEBEC), making Nigeria an easier place to start and grow a business. PEBEC’s policies, as with our national ID card rollout help integrate the informal sector.
“We also work closely with ECOWAS to implement initiatives like the Support Programme for Tax Transition in West Africa (PATF), improving the management of domestic taxation and ensuring better coordination of taxation in the ECOWAS and West African Economic and Monetary Union (WAEMU) regions,” he said.
On security, Buhari tasked Western countries to help its administration sustain its security strategies by proscribing the Indigenous People of Biafra (IPOB) as a terrorist organisation.
He further noted that he has done enough to change the narrative about insecurity in the country, citing the successes made in the fight against Boko Haram and relief to the Northeast region.
“In 2015, Boko Haram held territory the size of Belgium within the borders of Nigeria. Today they are close to extinct as a military force. The leader of ISWAP was eliminated by a Nigerian Airforce airstrike in March. The jets acquired from the US and intelligence shared by British were not provided to previous administrations and stand as testament to renewed trust re-built between Nigeria and our traditional western allies under my government.
“We urge those same international partners to take additional steps costing them nothing, by proscribing another group – IPOB – as a terrorist organization. Their leadership enjoys safe haven in the West, broadcasting hate speech into Nigeria from London, spending millions lobbying members of the US Congress, and freely using international financial networks to arm agitators on the ground. This must stop.
“Criminality and terrorism in oil-producing regions hamper production, and it would help if our western allies designated IPOB as a terrorist group, given their complicity in damage to pipelines and infrastructure.
“My administration is the only in Nigeria’s history to implement a solution to decades-long herder-farmer conflicts, exacerbated by desertification and demographic growth. The National Livestock Transformation Plan, putting ranching at its core, is the only way to deplete the competition for resources at the core of the clashes. Governors from some individual states have sought to play politics where ranches have been established; but where they have been disputes have dramatically reduced,” he said.
Asked what his government was doing to ensure food security in the face of spiraling inflation, Buhari accused the European Union (EU) of encouraging the export of their subsidized food into Africa and therefore undermining the continent’s food sustainability efforts.
“The EU’s policies in particular are all rhetoric of open trade – yet their Common Agricultural Policy subsidy programmes and export of those subsidized goods create dependence, undermine Africa’s self-sufficiency, and cause food poverty and starvation”, he said.
Speaking on the fight against corruption in the last seven years, the President said he had been able to secure the repatriation of looted funds because the nation’s international partners could trust his leadership.
Source: The Nation