Budget passed in the fourth month of the year with a paltry provision for fuel subsidy …

ALTHOUGH  the out-going administration of President Goodluck Jonathan may continue to be in denial, the economy is in dire straits. First, the 2015 federal budget which was passed by the National Assembly last week is coming in ludicrously late – four months in the year. Yes, the budget never came on time all through the life of this administration, but exceptional latitude seems to have mired the process this year.

Never being able to get the budget ready on time in six years is indeed symptomatic of the economic and fiscal management of the polity in this era. No studied attempt was made by the overly large economic team of President Jonathan to take the economy nary one step further than it was pre-2011. While oil prices were at their best ever in the international market, Nigeria’s economy was roiling – tumbling and stumbling until the current crunch which started late last year.

There is indeed crisis and it is uncanny that the Jonathan administration would want to leave the economy in a gale of crises. The budget has been passed with the provision of a paltry N100bn for fuel subsidy. This automatically means that government has unilaterally reduced the so-called subsidy drastically, given that about N500bn was said to have been spent on it this year alone. The subsidy is supposed to be a  safety net for cushioning the possible adverse effects that may be occasioned by hikes in pump prices of petrol and kerosene. This is a highly volatile issue that is capable of sparking sustained dissension in the polity. The labour unions have already warned that it would not accept any jumps in petrol prices.

Another signpost of an imminent economic upheaval is the scarcity of fuel which has started to manifest across the country. Oil marketers who are the importers of petroleum products claim the Federal Government owes them arrears in excess of N356.2 billion and some of the debt dates back to last year. They insist they can no longer import, store or transport products. They also cannot raise fresh loans while interests on old facilities are crippling.

Minister of Finance, Mrs. Ngozi Okonjo-Iweala, was a sorry sight as she explained that N156 billion was available to pay the marketers last week. She admitted that “despite revenue challenges facing the government”, the issue of fuel subsidy payments had always been a priority of government. She appealed to the marketers: “They are also Nigerians and they need to also cooperate with us.”

Since passionate appeals will not offset bank loans or make trucks move, it is apparent that scarcity and its attendant social anxieties will remain with us for quite some time. This fact will be more germane in this last month of administrative transition. Unless this government sources at least N300 billion in the next few days, the country could be in for a blistering energy crisis.

The chicken has come home to roost, so to speak, for the Jonathan administration, for failing to take smart economic measures all through its time. After the January 2012 fuel subsidy protests occasioned by a sudden hike in price, government had promised to build four green field refineries. Completion of these refineries would have ensured the stoppage of importation of products and saved huge foreign exchange, especially in these lean times of oil price crash. Not even one was built despite the huge oil earnings in these past few years.

Nigeria is the only major oil producer that still imports refined products, sometimes from non-oil producing countries.

We urge that the sitting government should promptly raise funds and pay the marketers to avert the looming crisis. The incoming government has its work cut out for it. It must review the entire gamut of the oil sector in order to revamp and clean the subsisting mess therein.

Of course, building of modern refineries must be a priority of the Buhari administration as the current importation scheme is not sustainable. Refining a good percentage of crude could also be a precondition for major oil corporations in Nigeria. They run huge refineries elsewhere; they should be mandated to do same here as government pursues a medium term policy of zero crude export.

It will be a shame for the Jonathan administration to end in a crisis.