On Friday, governors of Nigeria’s 36 states came out of an emergency meeting with the president on the rising opposition to government’s sudden removal of subsidy on fuel smiling, hugging and patting each other’s back.
Back in the closed door meeting, the governors, who are now strongest advocates of the policy reinforced their resolve to back the unpopular subsidy withdrawal policy, which has sparked nationwide protest, to the chagrin of Nigerians. The governors came out of the meeting preaching that subsidy removal “will create employment” and begging Nigerians to “sacrifice” and “trust” them to properly utilize funds that would be saved through the policy.
“It is a sacrifice that we must make as a nation for the country to move forward,” Rotimi Amaechi, Chairman of the Nigeria Governors’ Forum, said.
A Premium Times investigations, however, revealed that the governors’ real motivation for backing the policy is to enable them have control over more money, a situation that would empower them to dispense more political patronage, and in the process solidify their political bases.
A top cabinet source said the states’ chief executives officers saw in the fuel subsidy cut an opportunity to rake more money for their states since the Federal Government would no longer need to make deduction from their share of the Excess Crude proceeds to fund the subsidy scheme.
“The governors do not support subsidy removal because it will be beneficial to the masses like they claim, but because the policy ensures more money accruing to them monthly.” the official told Premium Times. “The fact is that the more money in their coffers, the more money they can steal.”
Up until October last year, the governors were vehemently opposed to the existence of a Sovereign Wealth Fund (SWF); a fund created in May 2011 to mop up the proceeds of excess crude sale usually shared monthly between the three tiers of government.
“The motive of the governors is to have more money sent to the states, as a replacement for the exterminated excess crude account,” a source said. “The President had to assure them that subsidy will go before they accepted to support Sovereign Wealth Fund.”
Our source disclosed that in several meetings with the President, the governors argued that contributing to the SWF and the subsidy scheme would exert excessive financial burdens on their states. The governors, our source further disclosed, then gave the President a condition: that they would never support the SWF for as long as the subsidy scheme remains in place.
The official said the President then informed the governors that the plan to cut fuel subsidy was already on the table and that he was prepared to implement it with the support of the governors, who he requested to help party members, state and federal lawmakers, labour unions and other interest groups in their states.
At the meeting with the President on Friday, a source said the governors reinforced their support for the policy, urging Mr. Jonathan not to back down despite the national outrage the policy has triggered.
They were said to have assured the President that they had their states under control.
Asishana Okauru, director general of Governor’s forum, could not be reached to comment for this story. Several to the allegation of governors’ preconditioned support for the removal of subsidy on fuel.
While President Jonathan has raised a Subsidy Investment and Empowerment Board, headed by Christopher Kolade, to oversee the investment of the N1.3tr he claims would be saved from the petroleum subsidy removal, the state governors are also planning big for the purported savings.
According Mr. Kolade, the Federal Government projects that the N1.34tr savings would be domiciled in a special account in the Central Bank of Nigeria (CBN) and used for projects like public works and youth employment, vocational training, urban mass transit scheme, roads, railways, water and agriculture scheme, as well as power projects
The project included in a document entitled Subsidy Reinvestment and Empowerment Programme (SURE) include, amongst others, construction and completion of eight major roads and two bridges, provision of healthcare services for about three million pregnant women, six railway projects, youth employment, mass transit system, 19 irrigation systems, and rural and urban water supply projects.
The governors have different plans for the huge amounts they hope to reap from the cut in subsidy.
Gabriel Suswan, the governor of Benue State, like most of his colleagues, has already made plans for the N7.6 billion he believes will accrue to his state if the government sustains the subsidy removal policy.
“If I decide that the N7.6billion is for building of classrooms, I can achieve that,” Mr. Suswan told reporters after the meeting.
In a debate town hall meeting by the Newspaper Proprietors association of Nigeria, Adams Oshiomole, the governor of Edo State also indicated that if he had more money flowing to his state – from the savings – he would be able to execute more road projects.
Labour unions say they are aware of these contradictory plans, saying government plans are “deceptive.”
A computation by the Nigeria Labour Congress indicates that the projected N1.134tr savings from the subsidy removal would be shared in this ratio: N202.23billion to the 774 Local Governments, N411.03 billion to the states, while the Federal Government takes N478.49 billion.
Labour argues that even if the Federal Government were trusted with the entire savings, the money would hardly be enough to complete even one-fifth of the projects it listed in the SURE document, describing government promises as deceits.
The labour unions have vowed to shut the country down until the president reverses the policy.
Nigerians deeply distrusts their leaders as successive governments have reneged on decades of promises and squandered trillions of oil earnings with impunity.
“All government’s claims of reinvesting saving from the removal of subsidy are deceptive,” Audu Oseni, a government policy researcher said. “After years of sharing excess crude, what did they achieve with it? the people cant trust government with more funds.”