Thursday, 23 February 2012
Nigeria: The Worst And Most Inhuman Subsidy!
The person principally in charge of the Nigerian economy, former World Bank Managing Director Dr. Ngozi Okonjo-Iweala yesterday at a public forum to discuss the challenges facing the Nigerian economy looked overwhelmed and at times confused as she battled hard to answer a few questions even as she adroitly avoided answering some others.
Dr. Okonjo-Iweala is Nigeria’s Minister of Finance and the Coordinating Minister of the Economy now expectedly referred to as the CME by a political class easily obsessed with slogans and acronyms. One of the questions Dr. Okonjo-Iweala avoided is the idea behind this piece. She could not explain the rationale behind the mind boggling and abnormal budgetary allocations to essentially guarantee a life of luxury to the ruling class.
Reading Nigeria’s budget is nothing different from reading a book containing the sharing formula for politicians and political office holders. It cost Nigerians about N1.3 trillion ($8.3 billion) to pay the salaries and allowances of political office holders. As a way of understanding this sum, N1.147 trillion ($7.4 billion) was ear marked for capital projects this year. Of this sum, just about half was truly spent which translates to the fact that, for every dollar the Nigerian government spends in developing capital infrastructure, two dollars are committed to paying the salaries of public office holders that have at best proved incompetent at bringing one of Africa’s biggest economies from the doldrums of economic failure.
This is not the sad part of the tale if you think that is sad enough. Do you know how this waste is funded? From borrowings! A total of $1.712 billion estimated at N265.36 billion is coming from countries such as India, China and France while the government is also expecting to wriggle out N794 billion ($5.1 billion) from the domestic market, bringing total borrowings for funding of fiscal 2012 at N1.059 trillion ($6.8billion). The Federal Government spending proposal for 2012 laid before the National Assembly by Nigeria’s President Goodluck Jonathan is N4.7 trillion ($30.3 billion).
Coupled with this, the government is also expecting to borrow another N600 billion ($3.9billion) from the capital market to refinance matured loans.
Apart from the cost of borrowing, note that the bulk of these borrowings are spent essentially to subsidise, in fact to cater for the entire means of life of public service holders. The Nigerian system guarantees the payment of medical expenses of public service holders. These are monies paid to Egyptian, Indian, German and other hospitals across the world. Like the Governor of the Central Bank admitted at the same event, government officials do not pay to fuel their cars. The same way they have no idea what it cost to feed a family or even pay for other rents. Their entire means of livelihood is paid for by the taxes of a people who are increasingly poorer by the day.
In 2009, Nigerian legislators received a total of N102.8 billion ($663.2 million) comprising “just” N11.8 billion ($76.1million) as salaries and a whopping N90.96 billion ($586.8 million) as allowances. The import of this gross disparity between salaries and allowances allows for just about 11% of their take home to be taxed. It would be fair to say they don’t even pay taxes to the people they so milk without regret. By comparison, let us compare the take home of probably the busiest public official in the world and Nigeria’s Senate President who is on holiday about a quarter of the year. Sourced figures indicate that the Nigeria Senate President has a total annual package amounting to N560million ($3.6million) compared to Barak Obama’s $400,000 (N62 million) as the President of the United States. Note that of Obama’s pay, $350,000 (almost 90 per cent) of that amount is taxed while just about 11 per cent of Nigeria’s senate president’s pay is taxed. The picture gets grimmer when you realise that it would take one Nigerian senator’s pay to pay the salaries of six American law makers. Compared to Nigeria lawmakers, Ghanaian parliamentarians are paupers!
The recent 2012 budget proposal provides a daily meal package of about N2.4 million/day for the president and his vice. There are also provisions to get special cars each worth N280million ($1.8million) for the president and his vice. Out of all of these, Nigerians remain poor and compared to their rulers they look absolutely inconsequential in the scheme of payments. An average UK worker earns about 22 per cent of the pay of UK parliamentarians, an average French worker earns about 27 per cent of the pay of their lawmakers, an average Nigerian worker earns 0.13 per cent of the lawmakers’ pay. In essence they earn zilch compared to their lawmakers!
This is the foundation the Nigerian economy is built on. We have seen that apart from the obvious haemorrhage on the economy by corrupt public officials, besides the pains resulting from economic restrictions and shoddy economic decisions, Nigerians are forced to borrow to maintain the lives of their rulers.
Nigeria of course cannot continue to subsidise the existence of its public office holders. Something has to give. If this is allowed to continue, Nigeria will go down and there will be no EU or US to bail her out. One debtor cannot bail out the other.
Action: Reduce the pay of all public officials by at least 70 per cent. This still leaves them as amongst the highest earners in the world. Nigeria would save about $500 million/year from its lawmakers alone if this is done.
Stop the barefaced corruption called “Security votes” allocated to Governors to do whatever they deem fit.
If all else fail, resign enmasse!
J Japheth-Omojuwa writes on www.omojuwa.com and he is the editor of www.africanliberty.org
Email write@africanliberty.org
You are the one that is misinformed!
The Chairman of the Revenue Mobilisation and Fiscal Allocation Commission RMFAC , Alhaji Hamman Tukur, said that salaries of public office holders in Nigeria are just N90bn out of about N1.3tn. That is direct quotation of news report from April 2009.
Check your facts before you say anything.
So, cut the head to treat headache?
It's a fact that military intervention is not a solution but what you Jonathan's supporters are ignoring is that Jonathan refuse to arrest and deal with the corrupt importers but instead decides to impoverished the Nigerian populace more; he can not give a minimum wage of 18k but he can remove the subsidy and reduce people's bargaining power by half. You guys also ignored the fact that there is actually no subsidy on the fuel in the first place. If you a real pastor you will watch what policy you choose to support.
This is misinformation. The
This is misinformation. The write wrote, "It cost Nigerians about N1.3 trillion ($8.3 billion) to pay the salaries and allowances of political office holders", this is obviously a lie. The N1.3 trillion is for the personnel cost (salaries) of civil and public servants and not for political office holders alone. Let us not misinform people because we want to score cheap points.
@Japheth..,you have my support,100 percent!
I am 100 percent in support of all measures to reduce the salaries and especially ALLOWANCES of public office holders-legislators,ministers,commissioners,president,vice president,governors,top civil servants,etc I am ready to join any STREET PROTESTS in this regard. However this has no relationship with the issue of DEREGULATION of the down stream sector and i am glad you did not attempt to lump them together. Consistently i have expressed my support for deregulation because we need more and more JOBS. Also only a STUPID nation will spend 30% of her national budget to subsidize consumption and importation. If some persons have decided to be stupid,i am not stupid.
Also i will not support any cut in cost of governance that will jeopardize the security of our PRESIDENT. We do not wish to have a repeat of the MURITALA experience. Not even an inch of opportunity should be given to the ENEMY. The President of the federal republic has MANY enemies. The Bullet proof cars are necessities.
Of Military Intervention & Petrol Subsidy
A call for military intervention is a pipe dream.It was Abacha who presided over the deliberate destruction of Nigerian petroleum sector.It was Babangida who institutionalised Corruption as the Fourth arm of Government.Removal of petroleum subsidy is no reason for the removal of a Government 7 months into its term of office.The solution to Nigeria's incessant scarcity of petrol, kerosene, Gas etc is the complete privatisation of our petroleum industry.An immediate cessation of the payment of billions of dollars as subsidy to a thieving cabal is highly commendable especially if the ordinary Nigerian does not enjoy any substantial benefit from the so called subsidy.Building new private refinaries will create thousands of jobs for our unemployed graduates and will ensure availability of petrol and kerosene constantly.We must all sacrifice to move our nation's economy forward.
NO MILITARY, but sacrifice for next generation
My brother, please think deep and fast! The military would NOT save your skin nor your neighbors'. The military have never being good at governance, and they never will be! The only way to get Nigeria moving is for all Nigerians to sacrifice. There are enough examples to emulate these days: Mandela's, Castro's, age-old French revolution, even the current Arab Spring wouldn't be far off-line. My greatest fear is that a number of patriotic Nigerians would weep endlessly in their old age having failed to dare the devil because they were too afraid of numerous minor excuses-excuses that they couldn't knock off their backs. Brave men/women are never held down by minor excuses and sufferings their wives/husbands, siblings would face once they match to battle. Maybe we should stop our minors from having dependents. That way they would focus since they'd have nothing to loose.
We can't take this no more,enough is enough
GEJ and his corrupt politicians are abt to xperience the greatest revolution ever!
Silversongo shut up face the
Silversongo shut up face the issue on ground. Its divisive talk like this that whip us sentiments which nigerian politicians capitalise on to make its citizens forget who their real enemies are.
Thanks for this beautiful
Thanks for this beautiful piece. I fought anger as I read through it all. It's easy to tell why our rulers have to belong to all kinds of cults or would kill anybody who stands in their way to get political appointment. But God is not asleep. They reap for the wind and we all know how insecure they all are. God, save Nigeria!!
Be the change you preach...
You've made valid points in this article, but we need to be the change we preach.I'll therefore suggest that you tell your mentor (El-Rufai) to publicly refund at least 70% of the funds Nigerians used to subsidise him while he was in Government. Then, let the ACN and CPC legislators also accept your recommended 70% cut in their salaries and allowances as well.At least,if GEJ and the PDP caucaus won't do it, the opposition should prove to us that they are a different breed we can trust.
TRUE STORY.
Real talk: a dear childhood friend of mine lost his mother last Sunday to a medical condition know as liver cirrhosis. She had been misdiagnosed(no modern diagnostic tools) and treated for hypertension - and for months too! - thereby worsening her condition and hastening her death. In a country that cared for its citizens, she could have been saved.
This, my friends, is a direct result of the corruption plaguing our beloved country. And my latest personal experience. Obviously, my Xmas will be a sombre and reflective one. She was a learned, kind Hausa woman that was failed by her country. May her soul rest in peace, amen.
Sooner or later, we all shall get to experience, directly or otherwise, the effects of the failure in our country's systems- be they healthcare, security, transportation or otherwise.
GEJ, PDP too greedy and calous! 2
British prime minister has no single jet. They hire British Airways planes for his official trips and earlier this year on the occasion of his wife, Samantha's, birthday they both queued up to take Budget airline, EASYJET, to Spain and paid like any other Briton out of their private pocket. It's not the British payers' responsibility to pay for Cameron's wife birthday treat.GEJ and Mark should "remove their wasteful subsidy" first before talking of fuel!Only in Nigeria do legislators and top public officers are housed,given free cars, drivers and even free petrol at the peoples' expense when they also collect monthly salaries! Yet these gluttons want to take away phoney "Fuel subsidy." Awoof masters who eat free food and get everything free are talking of further bending the back of overburdened Nigerians with fake subsidy removal.
There will be no end to "fuel subsidy" removal if Naira continue to depreciate- idiots
GEJ, PDP too greedy and calous! 1
GEJ, PDP too greedy and calous! It's outrageous the way these politicians and public office holders feast on the back of suffering Nigerians.What will GEJ and Sambo be eating in one year that will cost a Billion Naira? And then they will use another N280 million to buy bullet proof cars for the presidency in addition to the fleet of brand new cars bought this year, the ones they have already acquired. Only in Nigeria do the3y budget for same thing every year- Very wasteful and mismanaged country
Just look at the number of Presidential jet- 10 Jets for GEJ and Sambo to enjoy.
what a load of crap
Ikb you must be a buffoon.who is complaining?definitely not us. we practice progressive politics in the southwest.Awolowo was a marxist and people could relate to him.Zik did not offer what the yoruba wanted.A plan and a roadmap as documented in awo's many books and writings.thank God we did not allow him to deliver us to the hands of NPN(caliphate.)that is what is regarded as POLITICAL ENLIGHTENMENT..no matter how conservative a typical yorubaman, he is inherently a marxist.something that has been for 1000s of years.in hindsight we yoruba pride actually ourselves in calling out the prodigal sons amongst us. something which other ethic nationalities have not done.we threw out AD and PDP for non performance and corruption.and will surely do the same to the AC.obasanjo,tafa balogun,obanikoro,bode george etc are just examples of thieves who are no longer factors in southwest but are big on the national stage.Can you tell me of doin the same in your region.
military rule
concerned citizen, please do not call for the insurgence of the military yet. infact, never call for it. you know how inhumane the nigerian military men can be. do you think that you can have the opportunity to post on this site if the military had been ruling? We will all be completely subdued so please let us find a way to make GEJ see reason because as you may know, GEJ is our best PET.
Calling on millitary patriots
I hve been calling on the millitary for a long time to step in and save this country, put all these thieves and day light robbers who call themselves politicians in jail and hang some of them. Maybe the millitary is asleep. The time is now
AS FAR AS NIGERIA IS CONCERNED, MILITARY IS BETTER THAN DEMOCRAZ
At least one man was thieving and now millions are thieving. So the net effect justifies military intervention. Civilians have let us down because of their greed.
The Military administration may not be the best but it is far better than what we have now in the name of DEMOCRAZY!!!
Let us stop deceiving ourself.
Thanks
CONCERNED CITIZEN
Only fools and dead men don't change their minds.
The subsidy must go for sure, but nigeria's infrastructure and social well being is not ready. GEJ do not sign nigeria's death warrant because all and sundry will feel the consequences. As the saying goes, "Only fools and dead men don't change their minds. Fools won't, dead men can't." History beckons.
brilliant! brilliant!! brilliant!!!
The writer scored very high marks with this piece..This is a product of a well researched work backed with figures that the government can only dispute at its peril..I was really agitated after reading this work and there is something inside of me right now itching to break some bones...I was always tempted to support the removal of the subsidy after listening to the points supplied by okonjo.That position has been annulled for good after reading the smart contentions of this brilliant guy...These government guys are so sinful and debauched,they have heartlessly resolved to resist all entreaties to let go of their vicious hold on the jugular of our country...We shall meet up with you soon GEJ.
All talk, talk and more talk
All this talk will not help. PLEASE NIGERIA MILITARY SHOULD STEP IN AND TAKE OVER. We need total cleansing. Nigerian version of democracy as it is been practiced WILL NEVER take us out of this shame. I would rather support a military takeover than all these shame we call democracy.
Being polite in public discourse
Let me start by appreciating a master piece of analytical and well researched write-up by Jonathan. He did a good job of helping us focus on our national tragedy and the corruption in high places that is threatening to knock down our economy through the greed of a few.
However, whatever our suggestions towards finding solution to these myriad of problems, it will be unfruitful to turn a blind eye to the real offenders and start taking swipes at tribal groups. No tribe in Nigeria comprise of only right-thinking saints and no one is made up of only saboteurs. Let's be mindful of our language as insults in public places cannot solve our problem - that of getting GEJ and the national assembly to rethink the course they are chatting for the national economy.
The military is NO solution neither is outbursts that are not based on hard facts. The solution must come from us. I agree that it is time we come out and confront GEJ and those ruling us for their planlessness
They know no God
Conscience, the problem is that these leaders of ours know no God, and do believe in His existance. So they know nothing like judgement day, that is the more reason why you see them living like animals in a jungle where only the strong survive. Unless we keep our differences aside and face our common enemy squarely together, we are finished.
So you think the military are any better?
All you guys saying the military should take over are living in a dream world. Remember how Abacha stole billions? Don't look to any saviour to take you to the promised land in Nigeria. Your destiny lies in your hands.
leadership by example
The only way for our leadership to demonstarate commitment is to willingly give up their bogus pay and allowances for national development. until that is done, every other thing is mere talk.let GEJ stop deceiving himself in the name of reforms, he has not shown any committment whatsoever.
World Bank expert my foot ?
With these facts, the moron Jonathan and world bank agent Ngozi Iweala would rather remove oil subsidy than confront the waste and corruption in the system. World Bank expert my foot ? Which country in the world has world bank / IMF succeed ?
What a country
I seriously encourage revolution or at worst army to take over the government. This injustice to fellow Nigerians by these rouge politicians is getting out of hand.
Do they know how many nigerians are dieing daily because of thier corruption. Where is thier concience? for God's sake.
Allah will surely punish you all rouges and your kids. Know that eveil never leaves the house of eveil doers.
@yom yom ask senator tinubu to reduce her salary
Secrecy and anonymity is integral to the operations of the thieving elites like you. As their acts are done with absolute ruthlessness, deep deception and the most sordid spying and blackmail NETWROK in Abuja against GEJ. The Elite pitches individual against each other. With a view to destroying our plans for resource control. Creates chaos, deliberately spreads poverty and misery, and then usurps power placing its stooges in place. The new super rich called the oil marketers club, buy while the blood is still flowing in the North. Some tag it (Boko Haram, revolutions). Assassinations are part of their tactics to destroy our value system. Having amassed wealth and power, from the oil wells, theirs is to eliminate opponents, and proceed ruthlessly towards their avowed goal, of oppressing us in the SS. They operate through covert and overt societies, paid writers and organisations-just to twist our brains. So they ask who the hell is this ass hole-called Deri-animals
An sos to saharareporters and the good people of this forum
Pls nigerians there is serious trouble at no 60 sapele rd,benin.the property at this no belongs to the igiebor family and it is being seized from them by the esama of benin-chief igbinedion on the pretence that their father sold it to him b4 his demise.for d past 3 wks igbinedion had used his thugs to chase innocent nigerians doing biz in the place from the premises.infact he gave the tenants 7 days to pack.he had also used the nigerian police to chase the children of the owner from the property.he has promised to destroy d building any moment from now.pls naija act fast and save these hapless nigerians
tinubu and buhari ask ACN and CPC 2 their salaries in d senate
Secrecy and anonymity is integral to the operations of the thieving elites. As their acts are done with absolute ruthlessness, deep deception and the most sordid spying and blackmail NETWROK in Abuja against GEJ. The Elite pitches individual against each other. With a view to destroying our plans for resource control. Creates chaos, deliberately spreads poverty and misery, and then usurps power placing its stooges in place. The new super rich called the oil marketers club, buy while the blood is still flowing in the North. Some tag it (Boko Haram, revolutions). Assassinations are part of their tactics to destroy our value system. Having amassed wealth and power, from the oil wells, theirs is to eliminate opponents, and proceed ruthlessly towards their avowed goal, of oppressing us in the SS. They operate through covert and overt societies, paid writers and organisations-just to twist our brains. So they ask who the hell is this ass hole-called Deri-animals
@ Deri and Awolowo sentiments
@Deri, please do not mention Awolowo here, I beg you. The problems of this country started with tribalism in the West( by the yorubas) headed by Awolowo and his cohorts. It's amazing how you guys have forgotten how your Awolowo betrayed Zik using tribal sentiments to become the premier of the Western Region, where he was literally told to go to ''his people'' to become their leader. This was at a time when a young nation was trying to forge peaceful co-existence amongst the diff tribes. Till today, an average Yoruba man finds it difficult to call out their corrupt leaders for who they are. They rather see him or her as being a victim. While an Igbo man doesn't really care whose ox is gored to get things done, yorubas unfortunately tow tribal lines in almost everything that they do.
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