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Onovo faults IMF’s recommendation on fuel subsidy

Chief Martin Onovo, a petroleum sector technocrat and versatile politician, has taken a look at the recommendation of the International Monetary Fund (IMF) for Nigeria to remove of fuel subsidy, and stated that the organisation’s counsel to the country in the last 40 years has consistently failed.

Onovo, a 2015 presidential candidate under the National Conscience Party (NCP) and currently a chieftain of the Movement for Fundamental Change (MFC), who spoke to newsmen in Lagos on Sunday, stated that the neo-liberal postulations of the IMF were inappropriate for Nigeria’s social-democratic political history and culture.

He stressed that the global financial institution did not understand and had never understood the nation’s socio-economic predicament; hence its recommendations on Nigeria never worked for the nation.

Onovo, a petroleum engineer, stated, “IMF recommendations to Nigeria have failed consistently without exception since the last 40 years. The neo-liberal postulations of IMF are inappropriate for our social-democratic political history and culture. IMF clearly does not understand and has never understood our socio-economic predicament.”

Citing an example, Onovo recalled that in December 2016, Professor Yemi Osinbajo, the Vice President, had stated that “The downstream sector has been deregulated with the elimination of petroleum subsidy. This policy has removed from government, a burden of not less than N15.4 billion monthly.”

Onovo maintained that if Osinbajo’s statement, which was based on the IMF advice, had worked, “why is IMF now back to the same ‘remove fuel subsidy’ chorus again? It seems the IMF does not understand the ‘Price Cyclone’ associated with increasing the price of imported fuel.”

He maintained that, apparently, IMF researchers, whom he described as lazy, simply copy generic neo-liberal templates and recommend them inappropriately for Nigeria without a good understanding of the nation’s socio-economic challenges.

Onovo asserted, “The home-made economic plan of the Gen. Sani Abacha era under the leadership of Prof. Sam Aluko showed better results than all the inappropriate IMF recommendations since the last 40 years.

“The IMF correctly identified the problem as corruption in this government which, according to the same IMF, includes corruptly re-exporting expensive imported petroleum products. Now, instead of the IMF addressing the issue of massive corruption that they identified correctly, the IMF jumped to its pre-determined neo-liberal conclusion that is very clearly erroneous.

“Fuel price has been increased nearly 20 times since 1973 and the results have all been terrible. From 8k to 15k to 20k to 42k to 60k to 70k to N3.25 … all the way to N145/l. Why are lazy IMF researchers repeating a remedy that has consistently failed nearly 20 times?”

Why challenging the IMF to a debate on oil subsidy removal, he stressed that considering that Nigeria had become the global capital of poverty, an increase in fuel price now would make the nation’s situation even worse.

“Macro-economic instability will follow, inflation, unemployment, poverty, disease and insecurity will increase. The Naira will again lose value further.”

He maintained that “the permanent solution to the fuel subsidy situation is simple and has been known since the Gen. Yakubu Gowon’s regime. We proposed same during our presidential campaign in 2015 viz: We must stop the wasteful importation of expensive petroleum products by increasing domestic refining capacity.

“To increase domestic refining capacity is simply by maintaining and upgrading the existing refineries and building a new one. This we can afford and complete expeditiously.

“In the immediate term, we must recover the nearly N400 billion per year estimated to be lost to corruption in the subsidy scam.”