The Nigeria Labour Congress (NLC) yesterday told Nigerians to get ready for a nationwide strike and mass protest in the country, following President Jonathan’s decision to remove subsidy on petroleum products by January 2012.
This is coming barely 24 hours after the president presented a budget proposal of N4.79 trillion for the 2012 fiscal year to the joint session of the National Assembly.
Meanwhile, President Jonathan said he is still consulting with major stakeholders over the controversial removal of oil subsidy from next year.
The coordinating minister for the economy and minister of finance, Dr. Ngozi Okonjo-Iweala, made this known yesterday in Abuja while giving a breakdown of the proposed 2012 budget.
Concerning the proposed removal of subsidy, which was not mentioned at the presentation of the 2012 budget to National Assembly, she revealed that the president was still having talks on it and would come up with the decision at the appropriate time.
She noted that in the proposed budget the federal government plans to borrow a total of N794 billion to finance the budget deficit.
NLC acting general secretary Comrade Owei Lakemfa, in a statement made available to LEADERSHIP, said the budget proposal shows that President Goodluck Jonathan has no intention to lead the country out of the present socio- economic crisis.
He disclosed that the leadership of the union would be meeting by December 20, in Abuja to strategise ahead of the planned mass protest, adding that Nigerians must brace up to occupy the streets in a few weeks to come.
Lakemfa said since the government of Jonathan was put in place to punish the Nigerian people through a budget that is poverty-inducing and will cause a lot of hardship, the Nigerian people will have no alternative but to resist it.
According to him, the subsidy issue is coming on the heels of increased tariff on electricity, the move to massively sack workers in the name of merging parastatals, the attempt to collect more taxes through the return of toll gates, the refusal to adequately fund education, and refusal to pay the minimum wage, which is an impeachable offence.
Comrade Lakemfa lamented that the 2012 budget proposal is actually an anti-people budget designed purely in the service of the World Bank and International Monetary Fund (IMF) and their local lackeys who dictate to the Nigerian government.
The union leader said that the exclusion of fuel subsidy in the budget is not only tragic but a declaration of war on the Nigerian people.
He stressed that removing the subsidy would further impoverish workers and the Nigerian poor, adding that “it is a disaster waiting to happen”.
He said: “We call on all Nigerian workers and people to begin preparations for a general strike and mass protests. The people must be prepared in the next few weeks when the Jonathan administration begins to implement his anti-Nigerian policy. Nigerians should prepare to occupy the streets and public institutions to prevent them from being taken over by anti-patriotic forces.
“The NLC leadership will be meeting on Tuesday, December 20, 2011, to firm up strategies and give directive on the commencement of this protest and the resolve of workers and the Nigerian people to reclaim their country back.
“We call on the National Assembly to side with the electorate and the Nigerian people by refusing to pass this budget.
“Despite the country’s security challenges, it is curious that the Jonathan government has allocated a massive lion’s share of the budget to security. In the first instance, the major cause of the increasing wave of insecurity in Nigeria is lack of education and mass unemployment, which are direct consequences of the general collapse of public infrastructure such as public electricity, roads, education, health etc. The security challenges are further compounded by lack of political will and abysmal ineptitude of security agencies.”
He, however, warned that no one should underestimate the general mass poverty, unemployment and discontent that have increased bottled-up anger in the polity, adding that “the removal of fuel subsidy will provide the spark for mass protests such that even the increased security vote cannot buy enough arms to contain.”
On the life span of the 2011 budget, the minister said, “We are expecting to close the financial year by December 31, 2011, and resources not utilized will be remitted back; this is the best practice internationally and we are going to implement this.”
She described the budget as an “action one” which was designed to deliver measurable progress in the areas which will have the most impact on the lives of Nigerians.
She explained that the federal government intends to cut down on borrowing in financing the budget deficit, which stood at N862billion in 2011.
For the year 2012, she said, efforts will be channeled to reducing the domestic debt profile, which currently stands at 16.4 per cent, while more attention would be paid to the revenue side.
She informed of plans to restructure the MDAs with a view to cutting down on the controversial recurrent expenditure which was pegged at 72 per cent in the proposed budget.
According to Okonjo-Iweala, there are plans to keep reducing the recurrent expenditure from 72 per cent to 64 per cent, which, she said, would be attained by cutting down on personnel cost (salaries).
The recurrent expenditure for 2011 was at 74 per cent, which was dropped to 72 per cent in the proposed 2012 budget.
Of the 72 per cent recurrent expenditure, 35 per cent was for personnel cost while 5 per cent is for overhead cost, among others.
Said the minister: “ Mr. President is still meeting with the major stakeholders all over the country on the subsidy and, at the appropriate time, he will make a decision. We intend to finance the budget deficit, making sure our domestic debt is sustainable, because we don’t want to wrap up debts we cannot pay. We will do some borrowing but we want it to come down, just like we want recurrent expenditure to be on the downward trend. We are also looking at some privatisation proceeds we will be using to finance the deficit.
“We want interest rates to come down also. We will be working with the Central Bank of Nigeria on this. There are many categories of the recurrent expenditure: one is the personnel cost – what takes up our budget in this country is human beings, that is, personnel, people working in the public service, and that is by far where much of the funds goes. This is the large part of the budget, this is what pushes up the recurrent budget.
“What we have found out is that this is the primary portion of the recurrent expenditure. That is by far the largest part of it: personnel cost of the MDAs in the budget is 35 per cent, that I, the largest part of the recurrent while the overhead cost for MDAs is just 5 per cent, and we have other things in the recurrent, but the personnel and salaries takes the major portion. It is not that easy to cut this because you are talking of people’s salaries,
“We will find ways and means to curtail this, but, at the moment, we are trying to do things in the right manner by looking at duplications, looking at leakages, using biometric measures and looking at ghost pensioners – bring down the bills, to also streamline agencies to stop duplication of functions. I believe that when we finish this exercise, we will have idea of the type of government we have, and then we can move on to other measures if needed. In doing this, we will look at the civil service; it’s not just a question of looking at retrenchment but looking at the quality of people we have, the training, and get the right civil service to move this country into the next generation. To implement those policies we have, we are looking at the policy issues in the civil service as well.”
The four main pillars of the budget, she stated, include macroeconomic stability, strucutural reforms, governance/institutions and investing in priority areas. These were established to help achieve fiscal consolidation, inclusive growth and job creation, she said.
These, she stated, would involve blocking leakages, improving corporate tax collection and boosting internally generated revenue.
Others, she said, are: completion of viable ongoing projects of about 6,000, progressing the privatisation of the power sector in line with the roadmap, and vigorous implementation of ports and customs reforms to reduce the cost of doing business for the private sector.
She said there would be focus on passing the Petroleum Industry Bill (PIB), strengthening the security agencies, investing in critical infrastructure, as well as prioritising the agriculture sector.
In their reaction to the budget speech yesterday, experts at FBN Capital Limited, a subsidiary of First Bank of Nigeria Plc, said, in an online release, that the president’s speech trumpeted the inherent fiscal consolidation in the document although there was no reported mention of the scrapping of petrol subsidies.
They wrote: “The draft does reduce recurrent expenditure’s share of total expenditure by two percentage points to 72 per cent and the medium-term objective is a share of 70 per cent. These are necessarily slow steps to boost the capital budget because the already heavy bill for wages was swollen by generous pre-election increases in 2010 and has risen again as a result of the new minimum wage legislation.
“The main underlying assumptions are plausible in our view. The growth forecast of 7.2 per cent makes allowances for the global headwinds which are yet to have a marked impact on Nigeria.
The moment of truth will be the release of the GDP data for Q4, which is traditionally the strongest of the year. Growth reached 8.4 per cent in Q4 2010.
“The draft sets the oil export price threshold at US$70/b and assumes average production of 2.48 mbpd. The threshold is likely to prove one of the main bargaining issues with the assembly.
The figure for output strikes us as sound, provided that the amnesty in the Niger Delta continues (broadly) to hold, which is our assumption. Production averaged 2.43 mbpd in H1 2011 and the oil minister said last month that it had reached 2.70 mbpd.”