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Fuel Subsidy Removal: Labour Unions Accuse Finance Minister Okonjo-Iweala Of Joggling Stats To Reach False Conclusions

December 21, 2011

Nigeria labour unions under the auspices of the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) released a statement after a meeting with President Goodluck Jonathan on Monday December 20, 2011. After the meeting the labour union issued a far-reaching statement to debunk the reasons adduced by the federal government to support the planned removal of subsides in petroleum products.

Nigeria labour unions under the auspices of the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) released a statement after a meeting with President Goodluck Jonathan on Monday December 20, 2011. After the meeting the labour union issued a far-reaching statement to debunk the reasons adduced by the federal government to support the planned removal of subsides in petroleum products.

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However, the statement issued by the labour unions after the meeting with Jonathan did not state categorically that the unions vehemently opposed the removal of subsidies.

See press release below:
Outcome Of Presidency - Labour Interactive Session
The Presidency on Tuesday 20th December 2011 invited the Labour Movement comprising the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) to an interactive session.

The session was addressed by His Excellency, Dr. Goodluck Jonathan, President of the Federal Republic, Vice President Namadi Sambo, Finance Minister Dr. Ngozi Okonjo-Iweala who doubles as the Coordinating Minister for the Economy, and Petroleum Minister Mrs. Dieziani Allison-Madueke.

The Presidency claimed that the actual cost of petrol supply is N139 per litre and admitted that all Nigerians benefit from fuel subsidy but claimed that the rich benefits more.  It also claimed that the current N65 per litre price was so cheap that it encourages smuggling of PMS across the country’s borders.

It also presented a document, Subsidy Reinvestment and Empowerment Programme (SURE) under which it listed amongst other projects, the construction or completion of eight major roads and two bridges, provision of healthcare for 3million pregnant women, six railway projects, youth employment, mass transit, 19 irrigation projects, rural and urban water supply.

In its response, the Labour Movement noted that out of the projected N1.134 trillion to be saved from the subsidy removal, the Local Government allocation is N202.23 billion, States N411.03 billion and the Federal Government N478.49 billion and concluded that even if the Federal Government alone were to spend the entire N1.134 trillion, it cannot execute even a fifth of the projects it had listed. It noted that the Presidency’s presentation was simply a repetition of the presentations made by the Babangida and Abacha regimes and the Obasanjo administration, and that none of those promises were kept.

It insisted that if non-oil producing nations can refine petroleum products, a big oil producing country like Nigeria has no excuse to be import-dependent. Labour said Government has basic responsibilities to the populace and not make externally driven proscriptions like the IMF did on SAP under the Babangida regime and that its opposition to fuel subsidy removal is driven by its belief that the people must come first on all policies.

It pointed out that none of the presentations by the Presidency presented facts on the impact of oil subsidy removal on the populace particularly the informal economy where most Nigerians earn a living.

Labour also pointed out that some of the statistics presented by the Honourable Minister of Finance were joggled to reach false conclusions. President Jonathan in rounding up the session explained that the idea of inviting Labour was not to make it take a decision either in favour or against fuel subsidy removal but to present the government’s position and encourage mutually beneficial discussions.  He invited Labour to present its counter statistics and analysis of the Government documents for discussions on a future date. Labour accepted this.

New National Minimum Wage Implementation
While government elaborated on how the savings from subsidy removal will be spent on social infrastructure, Labour responded to say that government has shown consistently that it cannot be trusted considering how agreements and promises have been reneged upon in recent years. Specifically, labour complained that the Federal Government despite signing an agreement with it and issuing an enabling circular that the N18,000 minimum Wage will be implemented for Federal Public Servants from August 2011, implementation was yet to commence.  It concluded that failure or refusal of Government to implement agreements reached is one of the reasons Nigerians do not fully trust government.

President Jonathan in his response said he was shocked to find out two weeks ago that the Federal Government had not implemented the new wage. 

He blamed it on bureaucracy and that he was not informed about any difficulties in paying the new wage.  He said he had since directed his ministers and officials to commence immediate payment of the new wage.
In conclusion, the NLC and TUC expect that the Presidency will not remove fuel subsidy until it concludes the consultations with all stakeholders including Labour. Also, Labour is of the firm opinion that given the high level of insecurity in the country, the hardship Nigerians are facing and deepening poverty the removal of fuel subsidy will be injurious to the citizens and the country.

Owei Lakemfa                                                 John Kolawole
Ag General Secretary, NLC                     General Secretary, TUC

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