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Subsidy: How Presidency Over-ruled Finance Minister

Published by Guardian on Sun, 13 Nov 2011


PRESIDENT Goodluck Jonathan has over-ruled Finance Minister and Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala's decision that the Economic team of the federal cabinet, which she coordinates, should manage the communication strategy of the proposed subsidy removal.Authoritative sources disclosed that, after the Finance Minister started making plans on how the Economic team should explain to the nation the whole idea of the planned subsidy removal and how it would be implemented for maximum advantage to the country, she got a call from the presidency that the matter is the business of the Petroleum Resources Ministry, led by Mrs. Diezani Allison-Maduekwe.Although she was shocked by the directive of the presidency over the matter, the Finance Minister and her team immediately handed off the public communication strategies and focused less on the subsidy issue to allow the Petroleum Resources Ministry manage the debate.However, Nigeria's developmental partners quietly express concerns over what some diplomats and many in the international development community perceive as a less-than-effective communication between the Federal Government and the Nigerian public over the decision to remove the subsidy.A top official of an agency of the United Nations said 'the government is yet to engage the people in a constructive dialogue,' criticising what is seen as a mediocre job in how the oil subsidy removal is being explained by government.The official said the overwhelming focus on the role of a cabal in the petroleum sector in the explanation of the planned subsidy removal, only reveals 'official incompetence because government is empowered to, and can smash any such cabal if and when it wants to.'Even domestic stakeholders within the country have publicly been expressing dissatisfaction with the way the decision is being communicated.The Guardian had reported that 'critical stakeholders such as petroleum marketers, Nigeria Labour Congress (NLC) and Trade Union Congress (TUC) are yet to be briefed on the planned implementation of the policy.'Dr. Okonjo-Iweala, an active supporter of the subsidy removal plan, has argued that the subsidy is waste of funds, paid mainly to importers of refined products and, therefore, does not reduce fuel prices.But the presidential restraint on her role and that of the Economic team she coordinates in actively engaging the Nigerian public refocuses attention to what observers say is an indication of the turf battles in the federal cabinet where she plays additional roles in other ministerial assignments as a coordinating minister of the economy.Several other ministers have been known to be uncomfortable with this arrangement from the time Okonjo-Iweala was assigned that additional capacity.Earlier, the Coordinating Minister had disclosed that fuel subsidies would cost Nigeria at least N1.2 trillion ($7.7 billion) this year alone, a disclosure that forced the Senate to invite her for questioning before a Joint Committee.But when the Finance Minister hurriedly appeared before the Senate, the issue could not be conclusively discussed. Although Dr Okonjo-Iweala was in attendance, her presence was deemed insufficient to discuss the issue since her Petroleum Resources counterpart was absent.
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