REPLICATING THE GAINS OF DEREGULATION IN PETROLEUM SECTOR (2)
THE deregulation in the sector has created more jobs, increased government revenue and opened fresh vistas for profits. Like the telecommunication and aviation sectors, the cement sector has engendered positive multiplier effects on the economy.
Since opening up more businesses entails expanding related markets in the raw materials, human capital and financial sectors, a deregulated sector is surely an antidote to economic stagnation and backwardness.
From the foregoing, it is pertinent to echo here that the down stream oil sector stands to benefit amply if it is deregulated. Without doubts, a deregulated oil sector will release funds which now go into fuel subsidy for the provision of essential social amenities like roads, hospitals and schools.
Moreover, a deregulated oil sector will open up more private sector investments as more players will be attracted into the sector as against the present situation where it is regulated and under government's control.
More investments in this context means that more private refineries and other petrochemical industries will be set up, and this will consequently bring down fuel price. Still, such diversified investments in the sector will further lead to the establishment of allied industries which will use crude oil by products for production.
It is beyond doubt that Nigeria needs to diversify its mono based economy to ensure a more economically stable future. Furthermore, with local industries set up in the country, there will be less dependence on imports which further deplete the country's foreign reserves.
Aside the above gains, a deregulated oil sector means more revenue to government through taxes by the new investors. Also, there will be drastic reduction in the quest for foreign currencies which impacts negatively on the value of the Naira.
A devalued naira occasioned by undue pressure on foreign currencies erodes the purchasing power of Nigerians as the naira become worthless when compared with more stable foreign currencies like the dollar, euro or pound sterling.
A valued argument of the opponents of deregulation of the sector is that fuel subsidy as it is today is characterised by fraud. There have been heart-rending revelations that the management of the subsidy is anything but transparent. There must be an end to the continued pampering of a few fat cows at the NNPC and their oil majors collaborators.
And since government has given the assurance that it will embark on massive public sector works that will subsequently provide jobs for the teeming youths; provide mass transit for students and workers and build on the success already achieved, that is that the money will be managed transparently, it behoves on us to take the President Goodluck Jonathan led-administration into confidence in this regard.
Consciously, we are all living witnesses to the judicious use of the Petroleum Trust Fund (PTF) (proceeds from fuel subsidy) by then Gen. Sani Abacha regime; the Jonathan administration can do even better through an aggressive development programmes.
Given its lean resources, government must be more responsive through creating enabling environment for its citizens to be productive and contribute more meaningfully to economic development. This daunting challenge can only be surmounted if governments at all levels embark on massive infrastructure and human capital development, which in turn will ginger the private sector and make it a willing partner in progress.
To continue to spend the nation's meagre resources on fuel subsidy to the detriment of real development is to consign the nation into the backwaters of despondency and economic backwardness. Now is the time to put in place an economy that is productive and futuristic in terms of regaining lost economic grounds.
*Mr. Adekunle Ojo, an engineer, wrote from Ibadan.