The federal government has announced that it can no longer operate a full re-investable fund from the Subsidy re-investment programme, because of the partial deregulation of the downstream sector of the economy.
The decision was made known to journalists by the Minister of state for Finance, Dr Yerima Ngama after the National Economic Council meeting chaired by the Vice President, Architect Namadi Sambo on Monday with most of the governors in attendance.
According to the Minister, “if deregulation was fully implemented government would have realized the projected N1.134 trillion to fully carry out the projects it has planned for Nigerians. But because the petroleum pump price was reduced to N97, the projected fund has been reduced to N426 billion for the federal, state and local governments to share.”
“Out of the amount, the federal governments share went down from N478 billion to N180 billion per year” the Minister emphasized.
“Based on this, the federal government is to prioritise the safety net programmes like maternal and child health, public works programme, the mass transit and the technical skills acquisition” he said.
This is coming after the Special Aviser to the President on Media, Dr Reuben Abati debunked a report that quoted the President as saying the SURE document was no longer relisable due to the parital de-regulation of the downstream sector. According to Dr. Abati, the President only meant that the programme would have to be reviewed, in view of the government’s inability to fully remove petrol subsidy.
The national economic council is the highest economic decision making body in the country, comprising governors from the thirty six states of the federation, some key ministers, and heads of departments with the Vice President Architect Namadi Sambo chairing the meeting.
The meeting is coming just a month after the nation was brought on its knees wide a national strike following the decision of the federal government to fully deregulate the downstream sector by withdrawing the subsidy paid on the importation of fuel.
Following the wide spread agitations that decision was rescinded. The federal government was looking to save N1.134 trillion from the subsidy withdrawal.
The projects the federal government had chosen to execute were based on the projected fund but since that is no longer realizable.
The national economic council says it awaits the report of the inspection of all water and irrigation projects in the country on how to utilize the 137 intervention fund on agriculture for which it has constituted a sub-committee. It is also expecting an update on the progress made with the 2012 budget and the setting up of a committee to focus on the processes and procedures adopted in expending the MDG funds.