Why I opposed subsidy proposals in Buhari’s Supplementary Budget-Leo Ogor

 

Hon. Leo Ogor, alias the General, is the Minority Leader of the House of Representatives. In this chat, he speaks on why he opposed the fuel subsidy proposals in President Muhammadu Buhari’s 2015 Supplementary Budget and the constitution of House committees.

Why did you kick against the Supplementary Budget that Mr President sent to the House?

They were not too comfortable with it, they knew what I was saying is nothing but the truth but they insisted that they will do everything in the books  to stop me. But I think, at the end of the day, I was able to pass the message to the Nigerian people and  I am sure  I did justice to the budget because you saw the issue of the subsidy itself.

Firstly, you are trying to pay a subsidy of about N413bn, that is the highest figure  you can ever think of. That subsidy came under the fourth quarter, and it was notwithstanding that the price of PMS has dropped drastically at  the international  market.  And  you know the budget was predicated on $48 per barrel. But outside that, you can look at how long that there has been  a  drop in the price of oil. So, what has led to this high increase  subsidy specifically when the APC government has continuously insisted that the subsidy is a fraud?  And I want to quote Lai Mohammed verbatim; he insisted from day one that the subsidy regime is all fraud, it is a fraudulent process and there is no way they were going to allow it.

When you compare it to that of Jonathan’s admin, it is totally unacceptable. And that is why I insisted that  there is no problem  passing the budget. But the Committee on Finance, which is a committee of the House and not a committee of a political party, should  do a proper research and ask why we should be paying subsidy at such a high rate when the price of crude oil is dropping.
The other question  is, who actually are the beneficiaries of this subsidy? Because, at the end of the day, the essence of  subsidy is to make sure that the common man is the beneficiary. If government is spending N413bn in less than  seven  months, who are actually the beneficiaries of this subsidy? Is it the common man or the rich ones that live in high brow areas?  I think these are the questions we need to answer. How many vehicles does the common man use? How much is fuel in Abuja compared to fuel probably in Maiduguri? How much is it   in Abuja compared to Kano, compared to Bornu, compared to Zamfara, compared  to Onitsha or even Enugu? Are those people actually being subsidized? These are  many questions that we need to find answers to. And if you ask me, the truth here is that there is no subsidy in  all these areas except  Lagos and Abuja.
I was very keen and interested in pointing out all these issues so that, at the end of the day, we should look at this budget from  national perspective, look at national interest and address the issues  and there  are so many errors in the whole budget process because, when you look at the fiscal regime presented by the executive, clearly you will see that instead of them  bringing or rather articulating the subsidy as N413bn, in their proposal, it was presented as  N100bn.
And there  are some extra budgetary expenditure because it was broken down into third quarter, fourth quarter and added the  third quarter and fourth quarter together.
Now, if you look at the issue of All African Games; they have already spent the money and they are now coming back to seek approval from the National Assembly; that is a clear violation of Section 80 of the 1999 Constitution as amended because there was no budgetary provision for it.
But the support fund  for insurgency victims that they have actually paid, we are not against that. But what we are   insisting on is that Mr President should follow due process;  let there be respect for the rule of law and our Constitution because we all swore to the oath of allegiance and that oath of allegiance stipulates clearly that we must defend the Constitution of the Federal Republic of Nigeria without fear or favour. So if you are now spending funds without authority, that is a  very serious constitutional breach. You know that power corrupts and absolute power corrupts absolutely. If we don’t point out these things, tomorrow you will see them going beyond this breach.

I think when you look at the budget again, much as there were violations in respect of even  funds to the Nigerian military, there were already payments made but, because we have the interest of the Nigerian people at heart, vis a vis the insurgency crisis that we are facing, I stated, with all emphasis, that we would  do everything  to make sure that the Nigerian Armed Forces succeed in fighting the insurgency. But that does not mean that we must throw due process to the wind and I think it is more of a caution to the executive that there must be respect for the rule of law.

You can see that when the question was put, notwithstanding all those abnormalities, with all those errors, all those mistakes in the supplementary   budget, there was no single dissenting voice from the PDP because I had told them  that we must pass the budget but it is important that we point out those errors, those violations of the Constitution, those extra budgetary expenditure. And the beautiful thing is that we were able to show some high level of maturity, understanding of the business of governance in the whole process. And I sincerely want to thank my PDP colleagues for the maturity they displayed on the floor of the House.

Still on subsidy, the 7th assembly carried out investigation on the issue and nothing happened at the end of the day. The issue of subsidy continues to be on   the front burner. I think why the APC is quoted to have said it was a fraud was because some people were  alleged to have become wealthy without doing nothing. How come the investigation of the House at a time you were also one of the principal officers failed?

You are not right; something came out of it. I believe you are referring specifically to the Farouk Report. Recommendations went to the EFCC and people are still even being tried in the court today on account of the recommendations. I still remember that even the son of the Chairman of our party, the, Alhaji Bamanga Tukur, was actually taken before a competent court of jurisdiction, many people were tried and a lot of discoveries were made.

But my pain  in respect of this N413billion subsidy money is an offensive amount of money. How come that the price of oil is dropping and the subsidy is increasing because the Jonathan administration never paid such a huge amount of money at once. We are shouting there is no money and we have the moral justification to go and borrow from the domestic market at that high interest rate 413billion  to pay some people who are probably involved in round tripping. The debt will continue to be there, are we not in the process of enriching some Nigerians when the price of crude keeps dropping on a daily basis? I have never seen such economic calculations where the price of crude is dropping, you expected probably by now that even there should be no subsidy and we should be reducing some level of money from the price of petrol we are getting because this subsidy is purely for PMS. But today we are paying even more than when the price of crude was almost 100 dollars. So how do you justify it?

And this budget is coming less than six weeks to the end of the financial year. So I ask, what is the purpose of this budget? Because the law clearly stipulates that in the next six weeks, whether Mr President likes it or not, he is bound by the Constitution, to present a budget to the National Assembly because the financial year ends in December.

And unfortunately also, the Medium Term Expenditure Frame work, which was supposed to be submitted to the National Assembly, four months before the end of a financial year, has not been submitted. So these are some of the challenges that we need to look at, see how we can amend the financial year to see that the interest of the Nigerian people are protected. If care is not taken and if we decide to go by the law, we may end up having a major challenge on the budget presentation because the way it stands now, there is no way the President can present the budget to the National Assembly by the end of this financial year and that will violate Section 11 of the Fiscal Responsibility Act which says:  Federal Government, after consultation with the states, shall not later than  six months from the commencement of this Act call to be prepared and lay before the National Assembly for their consideration a Medium Term Expenditure Frame work for the next three financial years”. This provision was clear in 2007 when the Act was enacted.

Now here we have less then six weeks to go and, up till now, there is no Medium Term Expenditure Frame work, so how do we pass the budget? The way out is  to either extend the financial year to about April and see how we can work out the modality and the methodology of having the Medium Term Expenditure Frame work accepted by the House and now have a budget to be treated. Because there is no way we can carry on with the way things are at the moment.

This is a critical question that I need to ask; it has come up since 2012. And I think what happened in May this year, when the marketers refused to bring in oil so that they can get their claims and held the country to ransom for N111bn. And between then and now, we have N413bn  claims.  Experts are saying this subsidy regime is not sustainable. What is your opinion on that?

First, we have been shouting over it. We told them categorically, from day one, that there is the need for us to have a subsidy debate to know the advantages and disadvantages of this subsidy. Can we sustain it? Can we continue to subsidize imported products? Can we continue to use resources that are from a primary product that we export and use the proceeds to buy a finished product, thus  funding the employment opportunities of other nations? These are fundamental questions.
Is there room for competition? Can we allow other people to step into the market so that they can create effective competition? Can we survive this subsidy regime? As a patriot I will tell you no, because I would not want to mortgage the future of generations unborn playing the role of “Father Christmas”.

But we have continued to play politics with it. My worry at this particular time is that the huge subsidy that we are paying; I cannot imagine us paying N413bn, that is far more than 10% of the national budget in less than seven months. And I know some subsidy has already been paid because we budgeted only N100billion. But today look at the figure, N413bn and who actually gave anybody the right or the authority to incur such an expenditure?

So we need to really come to terms with the reality. But I think as a people because we have continued to live like people that have the opportunity of getting free lunch on  continuous basis, the poor masses of this country have been deprived of the right to development.

And I have told you that even in my home state of Delta, fuel is not sold at the N87 official price. The price is about N130. Even in Abuja now, with these queues, you cannot get fuel at N87 because you have to buy from the “black market”.
But my annoyance is that, why should crude be sold at $48 and the subsidy is increasing? These are questions people don’t want to answer, this is the reality we must come to terms with. Let us open the market so that competition will come in and there is the tendency that the price will drop. But where the cartel is controlling the whole system, you can be rest assured that they can still slap us with another subsidy bill of probably N600billion again in the next six months.