Do away with subsidy if you want to fight corruption, Sanusi tell Buhari

Mallam Lamido Sanusi, the Emir of Kano and former Governor of the Central Bank of Nigeria (CBN) has urged the Federal Government to remove oil subsidy if it intends to make headway in its anticorruption crusade.

The Emir who was the royal father of the day at the Institute of Charted Accountants of Nigeria (ICAN) organized 2015 Federal Government budget symposium, which was titled “Come Nigeria- The nation’s fiscal challenges and way forward for the new administration, held in Lagos yesterday, said the Nigeria National Petroleum Corporation (NNPC) has been drain pipe to the Nigerian economy for a long time.

He elaborated that in the last five years, the government gives the NNPC 445,000 barrel per day for local refining and consumption when the country’s refineries were working and continued do so even when they stopped working.

“If NNPC needs 445,000 barrel per day to run all its refineries at 100 per cent capacity for domestic consumption, what of now that the refineries are not working?

And if you were NNPC your government that is Father Christmas keeps giving you 445,000 barrel per day for domestic refining when the refineries are not working, what will you do with it?” he queried.

He faulted NNPC’s swap of crude oil, saying that the country has always been on the losing side in the deal.

Mallam Sanusi asserted that nowhere in the world do countries with high quality oil engage in swap and Bonny light is one of the most quality crude oil in the international market.

“Nobody does swaps unless country like Iran when it was under economic sanctions and can’t sell its oil at the international market or may be your crude is of very low quality,” he said.

The Emir added that country was not actually subsidizing the price of petroleum products, it was only edging it, adding that the oil subsidy was structured in a way that gives a lot of room for manipulation.

“Anybody who knows Economics knows what subsidy and edging are. We don’t have subsidy, we have edge,” he added.

According him, there was no way the country could win with this edging.

He wondered how the country’s Gross Domestic Product (GDP) was said to have gone up after the rebasing of the country when production did not in any way increase.

The former CBN former added that there was need to ask why the country’s revenue is so low despite its huge GDP.

“Between 2012 and 2013, the average price of oil increased by $1 per day. Average income went up by almost $800,000 dollar.

But the difference in oil revenue between those two years was $10 billion. You don’t need to be a rocket scientist to know there were leakages,” Mallam Sanusi stated.

He claimed that was nothing wrong with being an oil dependant country, because if properly harnessed, the oil sector could be used to spur structural change.

He noted that where the problem is the exportation of oil and gas without adding value to them.

He claimed that structural reform must involve the restructuring of the oil industry itself and the movement away from a country that exports crude oil to a country that recognizes oil as a basis for building aggregate development.

The Emir charged Nigerians to make some sacrifices to enable the country survives by paying more tax.

“Until you made that initial sacrifice to generate revenue, you will remain in a vicious circle.

You cannot provide education, employment and hospitals and so on,” he opined.

According to him, the government has to address the issue of dwindling revenue to be able to overcome the present economic challenges.