Against the backdrop of the International Monetary Fund (IMF) call for the removal of subsidy on petroleum products, the oganised labour has expressed mixed reactions over the issue.
While the Nigeria Employers Consultative Association (NECA) backed the fuel subsidy removal, both the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) and Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) warned that its removal would be clearly seen as an attempt to destabilise the nation.
They also expressed concern at the corruption in fuel subsidy regime and the nation’s increasing debt profile.
Speaking with The Nation, NECA’s Director-General, Mr. Timothy Olawale, said: “Like a sore that has refused to heal, the recurrent issue of fuel scarcity has reared up its ugly head again. We are where we are today because despite past sound counsel, the government has not been faithful to the deregulation of the Petroleum Motor Spirit (PMS) segment of the downstream oil and gas sector.
“Let us ponder and ask ourselves where the non-deregulation of the petroleum sector has led our economy: continued dependence on offshore sources for petroleum products supply, perennial shortage of petroleum products, loss of productive man-hours as a result of endless hours spent at filling stations, massive and unimaginable corruptions in the management of the subsidy dispensation, etc.”. All these, he averred, are not sustainable.
Giving insight into the need for urgent deregulation of the downstream oil sector, the NECA boss said over the last decade, the country has spent over N9trillion on fuel subsidy, about N15.5 trillion on capital expenditure, N2.1trillion on health and about N3.9 trillion on education, adding that this is a misplacement of priority and has shown that critical developmental items such as education, health and infrastructure have suffered due to the expenditure on fuel subsidy.
He said the fuel subsidy regime has succeeded in creating phony and emergency billionaires at the expense of millions of pauperised Nigerians.
Olawale expressed concern at the nation’s growing debt stock, with huge percentage of the budget, over the last decade going to debt servicing.
He said: “Borrowing could have been permissive, given the state of the economy in 2015, but not to the clearly humongous level it has turned out to be. Incurring debt for developmental purposes is not in question, but the over N24.39 trillion debt stocks, taking over 20 per cent of annual national budget to service, should be enough source of worry. Though the argument of debt to Gross Domestic Product (GDP) ratio is tenable, the IMF warned that Nigeria’s debt-to-GDP ratio, though good, was risky and cannot be guaranteed going forward.
Workers, under the umbrella of NUPENG and PENGASSAN, said imposing more stringent reforms on domestic revenue mobilisation, including increase in Value Added Tax (VAT) and securing more domestic oil revenues through subsidy removal in the present circumstance, among others, would not be in Nigerians’ interest.
In a statement signed by PENGASSAN General Secretary, Mr. Okugbawa Lumumba and NUPENG’s General Secretary, Afolabi Olawale, the unions said: “The leadership of NUPENG and PENGASSAN read with serious concerns and worries the reported statement made by the IMF media chief for Africa on the state of Nigeria’s economy and the unsolicited poisonous advice on further recovery of the nation’s economy.”
According to the oil workers’ unions, the statement by IMF has created panic in the country with associated hoarding of petroleum products, panic buying, and skyrocketing increases in prices of goods and services in the country.
“Clearly, IMF is speaking from the two sides of its mouth. In one breath, the media chief praised the significant progress the nation has made in terms of its GDP that increased by 1.9 per cent in 2018, from 0.8 per cent in 2017 on the back of improvement in manufacturing and other economic policies of the government, while on the other hand offering poisonous advice on further economic recovery,” the unions stated.
The oil workers said it was bewildering and baffling that IMF was not considering the pains and agonies Nigerians went through even to achieve the acknowledged gains of last year, with almost two-thirds of the world’s hungriest people among Nigerians.
The unions said the statement credited to IMF was loaded with poisons, considering the antecedents of IMF in the country’s economic challenges over the decades.
They noted that the various devaluation of the currency on the strength of advice of the IMF has been a very big burden on the nation for several years.
“The leadership of NUPENG and PENGASSAN are aware of what Nigerians are going through. We empathise with them and will not turn blind eyes to any further attempt to increase their pains and impoverish them further,” the unions warned.
The oil workers said they appreciated the efforts, commitment and determination of the President Muhammadu Buhari administration to put Nigeria in the right economic stead after several years of economic maladministration and mismanagement.
