The former governor of the Central Bank of Nigeriac CBN) and current Emir of Kano State has been credited with saying that Fuel subsidy, debt servicing is pushing Nigeria into bankruptcy..
Being a banker for many years, as well as a former governor of the CBN, he is eminently qualified to say so, be taken seriously. When a man like that makes a pronouncement about the economy, it is important to sit up, listen to his point of view.
The same man – when he was the Central Bank governor – raised an about how our national recurrent expenditure is a very major portion of our total national revenue (consumed by the National Assembly).
He was basically booted out of office for blowing that whistle.
He is now trumpeting the opinion that the Federal government of Nigeria should scrap the electricity and fuel subsidies.
A bottomless hole.
The amounts that government is having to pay out – regularly- to maintain fuel and electricity tariffs at the same price level is eating deep into the revenue of government drastically- Sanusi says.
Again, this is an opportunity for government to critically review their energy policies, or long-term strategies, if any. It is quite clear that the world is moving towards renewable energy and there were several articles like This One and that one talking about the importance of diversifying totally from fossil fuel utilisation – both for urgent environmental and economic reasons.
Is government listening – being proactive?
Government is still having to pay for subsidy (how much of that is genuine?) because government is not encouraging the use of electric vehicles. With the rains here and traffic being terrible, the fuel being wasted in traffic, on a regular basis, may be more than what that is actually burnt in moving vehicles around.
Obviously there is an urgent need to move away from the use of fossil fuel, for reasons that have been well enunciated elsewhere. If government institutes policies that would encourage the use of electrically powered mobility items like cars and motorcycles, then it will need to pay less and less subsidy because we would be importing ) condoning reduced fuel quantities.
There’s no law that says you must consume what you produce.
Now government has been battling the electricity problem for a while, without much success. Rather than continuing to burn humongous sums regularly in the name of paying for subsidy for the importation of refined fuel, why can’t resources be channeled into an alternative like actively encouraging the use of renewable energy?
All over the worldz there is aggressive de-emphasization of the use of fossil fuel for energy generation.
The trillions that is regularly paid to fuel importers as subsidy would be better channeled into constructing solar farms for industrial clusters (diesel generators can go silent), encouraging the use of electric vehicles, exploring the use of solar roofs like those championed by Elon Musk’s SolarCity and elsewhere, etc .
When your burn fuel, it is like setting fire to a stick of cigarettes it is gone forever – once expended, but when you invest in renewable energy you keep reaping from that Investment for a long time to come (that is true at both personal and government levels).
It is high time for government to adopt a more long-term approach in tackling this persistent drain of resources in the name of paying subsidy for the importation of fuel. The other approach of getting our refineries work efficiently & as an alternative solution is fruitless as we are too late to that party.
The world has moved on from burning fossil.
Are we nurturing chickens to slaughter for eating or rearing them for the eggs they produce?
This is the difference between burning fossil fuel to produce energy compared to going in the direction of sustainable renewable energy utilisation..
The definitive solution is to free up the resources currently being frittered away and refocus them on aggressive adoption / encouragement of renewable energy (though policy changes, instituting the appropriate legal frameworks and rapidifre implementation).
This is something we should start doing today -and not tomorrow.