OIL SUBSIDY REMOVAL SPLITS SENATE

Senate President David Mark yesterday tasked committees to suggest ways on how to reduce the cost of governance, accusing the Federal Government of operating a bloated bureaucracy.

Mark gave the charge to lawmakers as debate commenced on 2012-2015 Medium-Term Fiscal Framework (MTFF) and 2012 Fiscal Strategy Payer (FSP) submitted by President Goodluck Jonathan in October.

The documents, a framework for the federal budgets covering four years (in the case of the MTFF), contained the proposal to remove fuel subsidy which had become controversial. The government plans to do away with fuel subsidy from next year and use the funds to fix some infrastructure,

The Upper Legislative Chamber was split on the proposed removal as they began the debate.

In his remarks on the MTFF, Senator Mark noted that annual budgeting in the country has not worked, adding that government's plans for 2012-2015 must be fine-tuned before it can be acceptable to Nigerians.

'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 committees to take a better look of the details of the paper that have been submitted to us.

'It is based on the four-year rolling plan or budgetary plan. I think we 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 N170billion 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.

'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.

'These are some of the areas some of you who are experts may have to look at when the paper gets to you.

'The major problem is to identify what we can do to remove the over-bloated federal bureaucracy. The federal bureaucracy is obviously over-bloated. How have we ensured that it's no longer over-bloated? At the moment, we can't sustain it. How do we reduce it?

'Again, I don't understand what is meant by fixed exchange rate and stable exchange rate.'

The President's proposal on removal of oil subsidy has, however, divided the Senate as most members were sharply divided over government's decision as contained in the MTFF.

Some Senators including Deputy President Ike Ekweremadu, Emmanuel Paulker, Ayogu Eze applauded President Jonathan and his economic team for laying the foundation of a new economic order as contained in the MTFF, but others were unconvinced.

Although they unanimously applauded the President's effort over the proposed fiscal regime for the next four years, some called for caution on government's move to remove subsidy on oil.

Others, however, argued that rather than removing the subsidy outrightly, it should be done gradually to mitigate its economic impact on the masses.

Ekweremadu commended the President for 'bringing back the culture of planning ahead', but Chairman of the Petroleum Resources (Upstream) Committee, Senator Paulker hit the nail on the head.

He insisted that only the affluent class, 'with two to three cars are the ones enjoying government's subsidy.

'Even as an individual if you don't plan for your future, there's nothing you can achieve. With this MTFF, government has set out its plan of action for the next three to four years.

Works Committee Chairman, Ayogu Eze urged the chamber not to 'mix up the issues. This government has given us a roadmap on where it's going. This is not the final bus-stop for this bill.'

Minority Whip Ganyiu Solomon feared that unless the chamber does its homework well, Nigeria would be stuck with whatever decision it takes on the MTFF for the next four years.