The loss, waste of N2.56trn in 2022 budget amendment

BY SUNNY CHUBA NWACHUKWU

Sunny Nwachukwu (Loyal Sigmite), PhD, a pure and applied chemist with an MBA in management, is an Onitsha based industrialist, a fellow of ICCON, and vice president, finance, Onitsha Chamber of Commerce. He can be reached on +234 803 318 2105 (text only) or schubltd@yahoo.com

The supplementary budget presented to the National Assembly (NASS) for petrol subsidy from July to December 2022 has attracted divergent views and opinions (both in favour and against) from many Nigerians. The proposed supplementary budget of N2.557 trillion, considered by the federal government as a matter of necessity to accommodate “national issues of the moment”, sounds reasonable from the angle of national peace and tranquillity, and also for that same purpose, appears the most feasible option. But it is extremely costly and, indeed, very expensive, economically.
For many reasons that will be examined here, such huge, wasteful expenditures ought to have been seamlessly avoided by the drivers of this economy, especially those specifically managing the sources of the national commonwealth. This is on the grounds that ‘Plan B’, which is import substitution by advancing value addition strategies, through adequate utilisation of the available, numerous and diverse local raw materials in the real sector, wasn’t leveraged as a low hanging fruit. This has long been ignored and unduly delayed, against the open cries of economic watchers, even while the economy was sliding to this all-time low, in terms of inflation and unemployment rates.Yet, the nation is still burdened by such unnecessary spending as petroleum subsidy.
Perhaps one good example of the classical issues that need resolving in the government’s attempt to avert the looming trouble, is what the position should be on the already declared expected PMS pump price increase to N340 per litre, which had already been scheduled to take effect from 2022, upon the removal of the subsidy. This development portrays the government as practising official policy impunity. The policy summersault, not only violates the recently signed Petroleum Industry Act (PIA) that spent several years as a Bill, but it also exposes the nation’s oil sector to external criticism by the global big players, with respect to the negative reactions from potential and prospective foreign investors. This matter would have been taken care of had the government heeded the outcries against the demerits of this obnoxious products import policy. It ought to have been jettisoned long ago to create a healthy competitive environment for local refiners under a conveniently timed deregulation policy in the oil sector; rather than this make-shift, contingency arrangement that continues to bleed the economy!
The thing about it is that, if truly the giant sized Dangote Petrochemicals Refinery project kicks off operations by July 2022 (as proposed), the best it could offer is to reduce a fraction of the domestic daily consumption of PMS. It definitely should not be expected to religiously service the nation’s daily demands, by exhausting all its daily output from the 650,000 barrels of crude oil capacity, even though it has such potential to single handedly sustain the local consumption needs. But, because it is a private business that must strive to make better money and good profit, as a lone player it would push to exploit the market for pricing monopoly. Such tendencies will negate the purpose of pricing competition because, like the saying goes, “a tree cannot make a forest.”
It is my belief that the best approach, even though the economy is still bleeding profusely from serious and great financial losses on many other fronts as a result of professional inefficiency and official corruption, including the poor state of the local currency exchange rate, among others, requires a quick look at improving non-oil exports revenues, to further support the accruals from this old standing, lone source of foreign exchange earnings – crude oil exports.
This should be better planned to run concurrently with the performance expectation of the ‘newly born’ NOC, the Nigerian National Petroleum Company Limited (NNPC Ltd), now established as a profit oriented company. The regulatory authority (NMDPRA), also, is expected to carry out its functions efficiently and effectively, by making sure that all the privately registered refining facilities, along with the four government owned facilities being rehabilitated, join up at record time; and are all fully functional in the oil industry. It is only at that point that the nation can comfortably prosecute effective and mutually beneficial PMS pump price deregulation; and not this ill-timed N340/litre PMS ‘regulated price’ on the heels of subsidy removal.
In my personal capacity as a free citizen of the land, I make bold to say, without prejudice or equivocation, that a ‘Caveat emptor’ needs to be placed herewith, that, under no circumstance or situation, should the federal government and/or its agencies (including NNPC Ltd and NMDPRA) plan to extend further, at the expiration of this wasteful appropriation fund (N2.557 trillion) in the supplementary budget, beyond December 2022.
For those feeding fat on the nation’s treasury, at the expense of the well-being of the entire citizens and the Nigerian state, from a commonwealth, you are passionately urged to desist from further wickedness against the society. Make amends and forsake your selfish ways. Let everyone join hands and grow this economy. Let this economic sabotage stop. Let everyone support the general growth of the economy through everyone’s microeconomic activities and daily inputs.

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