FG sets up subsidy reinvestment board •Appoints Kolade as board chairman •Belgore to head FG’s negotiating team

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Written by Leon Usigbe, Christian Okeke and Adunola Oladapo Tuesday, 03 January 2012

SharePRESIDENT Goodluck Jonathan has set up a Subsidy Reinvestment and Empowerment Programme Board and appointed Dr Christopher Kolade as the chairman.

Similarly, he has named a high-powered committee headed by a former Chief Justice of Nigeria, Justice Alfa Belgore, to meet with the organised labour and all other stakeholders with a view to resolving issues that may arise from the removal of the subsidy on petrol.

The Kolade committee is to oversee and ensure the effective and timely implementation of projects to be funded with the savings accruing to the Federal Government from subsidy removal. Major-General Mamman Kontagora (retd) will serve as deputy chairman of the board.

According to a statement issued by the Special Adviser to the President on Media and Publicity, Dr Reuben Abati, the Subsidy Reinvestment and Empowerment Programme Board would also include two representatives of the National Assembly, two representatives of the organised labour, one representative of the National Union of Road Transport Workers (NURTW), one representative of the Nigeria Union of Journalists, one representative of Nigerian women groups, one representative of Nigerian youths, one representative of civil society organisations, the Coordinating Minister of the Economy/Minister of Finance, the Minister of National Planning, the Minister of Petroleum Resources, the Minister of State for Health, the Special Adviser to the President on Technical Matters, and six reputable individuals from the six geopolitical zones in the country, three of whom will be women.

It said the mandate of the board shall be to oversee the fund in the petroleum subsidy savings account, and the programmes specifically initiated to improve the quality of life of Nigerians in line with the transformation agenda of the president.

It added that the Board would have the following responsibilities:

(a) Determine, in liaison with the Ministry of Finance and Ministry of Petroleum Resources, the subsidy savings estimates for each preceding month and ensure that such funds are transferred to the Funds’ Special Account with the Central Bank of Nigeria.

(b) Approve the annual work plans and cash budgets of the various Project Implementation Units (PIUs) within the Ministries, Departments and Agencies (MDAs) and ensure orderly disbursement of funds by the PIUs in order to certify and execute projects.

(c) Monitor and evaluate execution of the funded projects, including periodic Poverty and Social Impact Analyses (PSIA).

(d) Update the president regularly on the programme.

(e)Periodically brief the Executive Council of the Federation on the progress of the programme.

(f) Appoint consulting firms with international reputation to provide technical assistance to the board in financial and project management.

(g) Appoint external auditors for the fund.

(h) Do such other things as are necessary or incidental to the objective of the fund or as may be assigned by the Federal Government.

Members of the committee to meet with the organised labour, civil society groups and other stakeholders are the chairman of the Governors’ Forum, Governor Rotimi Amaechi of Rivers State; Governor Mu’azu Aliyu of Niger State; Governor Peter Obi of Anambra State; Governor Adams Oshiomhole of Edo State and Governor Sule Lamido of Jigawa State.

The committee, which is expected to begin its work immediately, also includes the Minister of Finance and Coordinating Minister of the Economy, Mrs Ngozi Okonjo-Iweala; Minister of Petroleum Resources, Mrs Diezani Allison-Madueke; Minister of Labour and Productivity, Chief Emeka Wogu; Special Adviser to the President on Inter-party Affairs, Senator Ben Obi and Mrs Ngozi Olajemi.

Meanwhile, as tension continues to build and hardship already swelling following the removal of fuel subsidy, the Federal Government has said the deregulation of the downstream sector of the oil industry was not aimed at causing hardship on Nigerians but opening up the sector for growth and investments.

Most petrol stations across the country now sell premium motor spirit at the rate between N145 and N150, with the organised labour, civil society groups and opposition parties threatening showdown with the government.

But the government said it noted that with the take-off of the deregulation policy, “there might be initial hike in the price of fuel” and claimed that it was taking measures to check the trend through active participation of the Nigerian National Petroleum Corporation (NNPC) in the sale of fuel to guard against profiteering.

Minister of Information, Mr Labaran Maku, as the spokesperson of the Federal Government, made the remarks at Akwanga, Nasarawa State, while addressing the people on the implementation of deregulation in the downstream oil sector.

Mr Maku, in a circulated email on his behalf by Joseph Mutah, told the people that the Federal Government had entered into partnership with the original builders of the nation’s existing refineries to turn them around for production at installed capacity between 18 and 24 months.

He said three new refineries would be built in Lagos, Kogi and Bayelsa states by the private sector operators, with the government equity participation to refine 400, 000 barrels of crude per day.

The minister assured that in the next two years, all the petroleum products consumed in the country would be produced locally.

Mr Maku claimed he was worried that the price of fuel had stifled the growth of the downstream sector and prevented private sector investments in the refining of petroleum products.

He said private investors would now seize the opportunity of the deregulation to establish refineries that would compete in production to bring down the price of petrol in no distant future and create more job opportunities for Nigerians.

According to him, for development to take place in the country, decisive measures had to be taken in order to correct the wrong policies of the past.

He cited the implementation of deregulation in Ghana’s oil sector, which he described as a proactive measure to start oil exploration and refining on sound policies.

The minister appealed to Nigerians to disregard those calling for mass protest over the deregulation of the downstream sector of the oil industry, saying the aim of the policy was to transfer subsidy from consumption to production.

He promised Nigerians that funds that would accrue from deregulation would not form part of the regular budget, but would be managed by credible Nigerians from diverse interest groups and would apply the resources to projects that have direct bearing on the common man.

The minister said part of the Subsidy Re-investment Programme is the restoration of the railways across the country to provide alternative and affordable means of transportation of goods and services, while the government would provide interest-free loans to transporters to buy buses that would shuttle Nigerians at subsidised cost in order to ameliorate the high cost of transportation.



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FG sets up subsidy reinvestment board •Appoints Kolade as board chairman •Belgore to head FG’s negotiating team