explained that subsidy removal was
necessary to end the vast corruption taking
place under the subsidy regime, and
promised to reinvest the saved money into
infrastructure, health and education. The
government had to introduce a partial
subsidy as a result of widespread protests
that took place against the subsidy removal,
and set up a fund into which the saved
money would be channeled. This fund was
called, the Subsidy Reinvestment and
Empowerment Programme (SURE-P) it was
charged with using the subsidy savings to
invest in infrastructure and empowerment
initiatives that benefit Nigerians. With $ 2.5
billion having flowed into the project – and a
further $ 1.6 billion in 2014 – what has SURE-
P achieved so far? Ag. Head of Investigations,
Yemi Olakitan takes a critical look at the
programme, examining the controversies.
On Monday, 2 January 2012 in response to
the fuel subsidy removal by the Federal
Government of President Goodluck Jonathan
on Sunday, 1 January 2012, widespread
protests took place across the country. The
protests was tagged Occupy Nigeria. 16
people were reportedly killed during the
protests. The protest was characterized by
civil disobedience and strike actions.
Nigeria is said to be the largest oil producer in
Africa, but still imports fuel despite producing
about 2.4 million barrels of crude oil daily
which is exported to be refined abroad and
exported back into the country. American
statesperson, Hilary Clinton, during a visit to
Nigeria described the situation as ''a clear
case of mismanagement.''
Cheap petrol is regarded as the only benefit
Nigerians receives from the state, hence the
widespread disapproval. Governor of the
Central Bank of Nigeria Lamido Sanusi said
the subsidy was unsustainable". The
government explained that subsidy regime in
which fixed prices are maintained irrespective
of market realities has resulted in a huge
unsustainable subsidy burden. Fuel subsidies
do not reach the intended beneficiaries.
Subsidy level is correlated with household
income, as richer households consume larger
quantities of the products.
According to the Federal Government at the
time, subsidy administration is beset with
inefficiencies, leakages and corruption.
Subsidy has resulted in the diversion of
scarce public resources away from
investment in critical infrastructure, while
putting pressure on government resources.
Subsidy has discouraged competition and
stifled private investment in the downstream
sector. Due to lack of deregulation, investors
have shied away from investment in the
development of refineries, petrochemicals,
fertilizer plants, etc. Investigations reveal that
since the year 2000, government has issued
20 licenses for new refineries, none of which
has materialized into new refineries. The
deregulation of the downstream sector of the
petroleum industry, it was argued will lead to
private sector investment in refineries and
petrochemicals, which will generate millions
of jobs and bring prosperity.
Huge price disparity has encouraged
smuggling of petroleum products across the
borders to neighboring countries, where
prices are much higher. Nigeria therefore
ends up subsidizing consumption of
petroleum products in neighboring countries.
Despite the explanations given, protesters
refuse to cooperate with the government.
Former President Olusegun Obasanjo had
tried to remove the subsidy but have backed
down because of protests and reduced it
instead.
As part of palliatives aimed at cushioning the
effects of the subsidy removal, the federal
government had announced a 'massive mass
transit scheme' about 1600 diesel-powered
mass transit vehicles, was promised to be
distributed. In a similar vein, President Good
luck Jonathan established the Subsidy
Reinvestment and Empowerment
Programme, SURE-P as a palliative measure.
He inaugurated a committee to manage the
Programme. The Committee had the following
membership: Dr. Christopher Kolade, CON
Chairman, Gen. Martin Luther Agwai (Rtd) –
Deputy Chairman, Hon Minister of Finance/
CME Member, Hon. Minister of Petroleum
Resources Member, Hon. Minister National
Planning Member, Hon. Minister of State
Health Member, Prof. Kunle Ade Wahab and
others.
The president explained that The Subsidy
Reinvestment and Empowerment Program
(SURE-P) is an intervention mechanism for
the nation's development.
''I inaugurated the board of the Subsidy
Reinvestment and Empowerment Programme
(SURE-P) under the leadership of Dr.
Christopher Kolade. I also had the great
privilege of kicking off the Public Works
Women and Youth Empowerment Programme
which is an intervention programme designed
to employ 370,000 youths in the year 2012
with 30% of those jobs being reserved for
women. This programme will also place
young graduates as interns in firms and
companies with a view to sharpening their
skills preparatory to engaging in
entrepreneurship and those firms that choose
to retain these graduates will be given
incentives by the Federal Government. This is
only one step in government's plan to provide
the enabling environment for all willing
Nigerians to get to work and compliments the
Youth Enterprise with Innovation in Nigeria
(You Win) initiative which I launched on the
11th of October 2011.''
According to the PDP led Jonathan's
Government, the Subsidy Reinvestment and
Empowerment Programme was designed to
mitigate the immediate impact of the partial
petroleum subsidy removal on the population
by laying a foundation for the successful
development of a national safety net
programme that targets the poor and
vulnerable on a continuous basis.
Regrettably, SURE-P has been trailed by one
controversy or the other. Chief of them was
the N2.2billion SURE-P fund reportedly used
for secretarial services and another N500
billion allegedly missing. According to the
then Chairman, Christopher Kolade of the
Sure-P committee who later resigned on the
ground of old age, the media had promoted
the inaccurate story that such an amount was
missing from the fund. The former chairman
said in an interview that it was all a widely
celebrated rumour, he said, 'I have a grouse
against the media. First of all, if you look at
our accounts, our budget; you will find the
amount earmarked for secretariat services, in
order words, for running our offices and staff,
etc nationwide for 2012. It was only N1billion,
so if anybody is going to spend more than N1
billion on the secretariat, he has to go back to
the National Assembly to get funds from
other places to supplement the N1 billion. So,
we did not have N2.2 billion. What has
happened; we put down our reports to the
National Assembly that so far, to that point,
we had spent N220 million on secretariat
services. Somebody in National Assembly
read that to mean N2.2 billion. When we went
to National Assembly and they said how come
you spent N2.2 billion for secretariat services,
I said where is that? And they said we should
look at our account. We said, no, read it
properly, it's N220million. Members of the
media were there. When the publications
started, it was N2.2 billion they published.
They did not attend to the correction that we
made that it was N220 million. Until now, we
are still talking about N2.2 billion. I don't
know what else my committee should do to
correct this and therefore, I go back to what I
said about the N500 billion allegedly missing.
There are mischief makers here. There are
people who are deliberately spreading wrong
information because they want to create
confusion.''
Critics also accused the SURE-P of duplicating
projects and defrauding the nation by making
double payments for projects already
embarked upon and financed by the various
ministries and agencies. The National
Assembly had also took a swipe at the
Subsidy Reinvestment and Empowerment
Programme (SURE-P), describing it as a drain
pipe on the Nigerian economy, it called on the
government to scrap it if there were no
improvements. The Lawmakers who
expressed their lack of confidence on the
activities of SURE-P stressed that the agency
was a duplication of activities already carried
out by existing Ministries, Department and
Agencies, MDAs in the country.
The former chairman Dr. Christopher Kolade,
CON who later resigned, citing old age, had
explained that the SURE-P's funds are split
between the Federal Government and States
and Local Government, and are used in two
ways: to help fund infrastructural
development; and to support social security
programmes related to issues such as women
and youth empowerment, unemployment,
and community service. He also said the
programme was an intervention mechanism
aimed at helping out on government's
abandoned projects or improving on them.
Investigations revealed that, when the
National Assembly asked SURE-P in
November 2012 to produce its 2012 budget
expenditure analysis, lawmakers were
dismayed to hear that lots of the things
SURE-P committee members pointed to were
projects already being carried out by the
Federal Government. The SURE-P board
claimed to have spent N16 billion ($ 100
million) on the Benin Ore Shagamu road – a
project for which the Federal Government had
already awarded a N65.2 billion ($ 400
million) contract in September 2012 – and
said it had contributed N9.3 billion ($ 57
million) to the Lagos-to-Ibadan railway – a
development for which a $ 1.4 billion contract
was signed between the Federal Government
and the China Civil Engineering Construction
Corporation (CCECC) in August 2012.
Senator Danjuma Goje, a member of the
Senate Committee on Petroleum said, "They
are not initiating any new projects, they only
put money into existing projects."
Posted By David Aniemeka
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