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Senators Still Divided Over Subsidy, Fail To Reach Consensus

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ABUJA, December 6, (THEWILL) - Senators Tuesday remained divided over the federal government’s planned withdrawal of subsidy on petroleum products and failed to strike a consensus on support for the contentious plan.

This is coming a week after the House of Representatives rejected the plan describing it as ‘premature.’

Instead the Senate pushed the responsibility and even the consideration of the Medium Term Expenditure Framework (MTEF) to the Joint Committee on Finance, Appropriation, and National Planning to look into the proposal and revert to the chamber within a week.

Nonetheless, Senate President David Mark lampooned the budgeting process in his remarks before the passage of MTEF through the second reading, saying the essence of the bill going into committee, is for the committee to look at the proposals holistically adding that the yearly budget system has failed to address the problems of development in the country.

"I will like to sum up by saying that I think the paper is just a framework at this stage and for all intents and purposes the figures are preliminary figures, they are not fixed. There is no doubt that a paper of this nature will capture everything, there will be omissions and by going to the committees, the essence is for the committee to take better look of the details of the paper that has been submitted to us.

"It is based on the four year rolling plan or budgetary plan. I think it is agreed that this yearly budgeting system has not worked, if we have a rolling plan it is easier for us to see at a glance what we are looking at for the next four years.

"However, even as a person I am a bit worried that the capital increase is just per N170 billion from 2011 to 2012. How will a mere increase of N170 billion really be a projection. So, when the paper gets to the joint committees, I think these are the areas they may want to look at", he said.

Also, Mark bemoaned what he called the over bloated bureaucracy and asked that efforts must be made to reduce the federal structure. According to him; "The federal bureaucracy obviously is over bloated, how has it been captured? What have we done in this paper to ensure that this over bloated federal bureaucracy is not continued?

In fact, we should make every effort to reduce the federal bureaucracy. At the moment we simply cannot sustain it. It is not only over bloated it has got a very high consumption rate and national consumption rate too. These are some of the areas that when we refer them to the committee, the committee will have to look at properly.

"I am not an expert but I don't understand the difference between the fixed rates and stipple exchange rate, I appear to get a little confused when I read this. Is government now going to fix the exchange rate or is it going to allow the market determine the exchange rate? These are some of the areas some of you who are experts may have to look at when the paper gets to you", he said.

However, senators who supported the removal of fuel subsidy, which was part of MTEF said that considering the amount of money injected into the subsidy by the federal government, the subsidy was not in the interest of masses but rather in the interest of high class in the country that are only a few.

But senators who opposed the removal said the proposal would increase the hardship of the average Nigerian.

Senators in Support of Removal

Speaking in support of removal of fuel subsidy, Senator Ayogu Eze (PDP, Enugu) said if government does not remove subsidy now it will come to a time in the country when government may shut down.

Senator Emmanuel Paulker (PDP, Bayelsa) also supported the removal of fuel subsidy saying majority of Nigerians are not benefiting from the scheme.

In his own contribution, Senator Dahiru Awaisu Kuta (PDP, Niger) said the removal should be gradual until Nigerians are able to appreciate the benefit of the removal.

Senators who want subsidy policy to remain

Senator Abu Ibrahim (CPC, Katsina) who kicked against the removal of fuel subsidy in the 2012 budget said the removal will not be in the interest of his people because he has interacted with people from 9 local governments out of 11 in his senatorial district saying they are completely against subsidy removal.

Senator Garuba Gamawa kicking against the removal said; "We need to be very careful in dealing with this paper…I am not in support of removal of subsidy in anyway.”

Senator Isa Galadu- said, "I found a lot of contradictions and inconsistencies in the document. When you limit your revenue on oil at 70 and recommend that we extend 2011 budget to march 2012 means that this document is still a work in progress. We need a legally formed organization to monitor capital project.

"Before Yar'Adua died we had twenty billion dollars oil reserve money in our foreign accounts, where did that money go. It would have cushioned what we are going through. In removing subsidy, you just want to punish Nigerians," he said.

On the Medium Term Expenditure Framework, most senators who spoke applauded the federal government on MTFE because according to them it will enable government stay focused on capital projects in the country so that the country's agenda of vision 2020 can be realized.