Chief (Engr.) Martin Onovo, a stakeholder in the nation’s oil sector, and the 2015 presidential candidate, of the National Conscience Party (NCP), has said that subsidy removal at this time will be disastrous and spells doom to the nation, describing the move as reckless.
Onovo, who spoke to Sunday Independent exclusively, stated that the attempt to recklessly remove subsidy at this time is lazy, tyrannical, planless and disastrous.
According to him, “Energy is critical to productivity and economic development. To increase productivity, we must provide abundant and affordable energy supply.
“The removal of subsidy does the contrary. It makes energy unaffordable and will surely lead to economic recession. This cannot be contradicted as it was confirmed when Gen. Buhari removed the subsidy on petrol in 2016.
“The immediate consequence of this reckless attempt to remove subsidy is hyperinflation. This will be followed by devaluation and increasing poverty.
“Any policy that increases the inflation rate devalues the Naira further and increases poverty is unpatriotic. It is tantamount to national economic sabotage.”
Onovo stressed that considering that “We are importing this refined product that we should be exporting for increased revenue, and to import, we need FOREX, then, following the devaluation, we need more Naira to get the same amount of FOREX for the refined product.
“This will put even more pressure on the Naira and further devalue our currency making us poorer. The increased domestic production costs from increased fuel price will further constrain domestic productivity.”
Onovo stressed that without domestic refining, there is no benefit to subsidy removal and the consequences are crushing.
According to him, “The consequences include; inflation, devaluation, increased poverty, increased unemployment, increased crime, increased production costs, decreased Productivity, etc.
“The promised investments in infrastructure, education and health are naïve and erroneous. The so-called savings from the subsidy removal will be dissipated by the economic instability contraction and disruptions arising from the removal.
“Where are the savings and investments from the removal of subsidies on diesel? Where are the savings and investments from Gen. Buhari’s removal of subsidy in 2016?
“The condition precedent to subsidy removal is domestic refining. There is no superior option to domestic refining.
“Domestic refining will increase our GDP, reduce costs, guarantee energy security, improve revenue, preserve FOREX and strengthen the Naira. This policy is a distraction from the right answer which is domestic production.
“The right answer is to first fight the incompetence, waste and corruption in the subsidy scheme and then focus on restoring and upgrading domestic refining capacity.
“The audit of subsidy claims by the Jonathan government confirmed that about thirty percent was fraudulent. Current estimates by credible professionals confirm that about fifty percent is fraudulent.
“First step should be to deal with the Incompetence, Waste and corruption in the subsidy scheme.
“Second step should be to ensure that all domestic refineries can return to production as soon as practical. Then, we can talk about the removal of subsidies.”
