Determined to go ahead with the withdrawal of fuel subsidy, the federal government has disclosed that it will spend the sum of N478 billion this year to execute projects that will benefit from the fuel subsidy removal.
This was revealed by the Coordinating Minister for the Economy and Minister of Finance, Dr Ngozi Okonjo-Iweala, during a town hall meeting with staff of the ministry convened to discuss deregulation and the removal of petroleum subsidies.
The projects will be funded from the federal government portion of the savings from ending fuel subsidies, which is estimated to be about N478 billion in 2012.
She explained that “subsidy removal is, strictly speaking, not an accurate description, because what government is doing is subsidy reallocation into areas that will have the most impact on Nigerians and the future generations.
The federal government is considering such projects as “the construction, completion and rehabilitation of rail, refineries, key federal highways, hydro stations, information technology and water.
In addition, the Subsidy Reinvestment and Empowerment Programme (SURE) under which the projects will be executed will also provide for the implementation of short term social welfare programmes to alleviate the impact of subsidy removal on Nigerians.
The social welfare programmes, she disclosed, “will include mass transit, public works including training in artisanship for unskilled youth and social services to reduce high maternal and infant mortality rates.”
The minister told the staff that she decided to speak to them because the ministry is ‘’a front line one and charity should begin at home.”
Acknowledging the harsh impact of the removal of subsidy on Nigerians, especially on food and transport costs as well as school fees, she said: “Government feels the pain of Nigerians but sincerely believes that it is in the best interest of the country to take the decision.”
She said the plan to introduce 1,600 buses into the country’s transportation sector as well as other measures being taken on mass transit were designed to ameliorate the impact in the short term, while assuring that the current high prices will not endure.
Okonjo-Iweala added that the appointment of the Kolade Committee of eminent Nigerians to oversee the projects under the SURE programme was meant to boost public confidence in the process and assure Nigerians that “this will not be business as usual.”