- Government ready to talk to all aggrieved groups
Tobi Soniyi in Abuja
Nigeria is in dire straits and lacks enough funds to meet its obligations, the Minister of Information and Culture, Alhaji Lai Mohammed, said wednesday.
The minister stated this in Abuja while explaining the decision of the federal government to increase the pump price of fuel, adding that the policy was not aimed at removing subsidy but to free funds to help the government meet its other financial obligations.
“The current problem is not really about subsidy removal. It is about that Nigeria is broke. Pure and simple!” Mohammed said.
The minister, who briefed State House correspondents after the Federal Executive Council (FEC) meeting presided over by President Muhammadu Buhari, called on Nigerians to bear with the government.
With him at the briefing were the Attorney General of the Federation (AGF) and Minister of Justice, Abubakar Malami; Minister of Power, Works and Housing, Babatunde Fashola (SAN); and Labour and Productivity Minister, Dr Chris Ngige.
He said Nigeria was “like somebody who has been earning N100,000 a month and he is faced with a situation where his employer says henceforth you will be earning N10,000 a month”.
“He would need to make some very painful decisions and some very painful adjustments. That is the situation with Nigeria today. A few months ago, we were earning as much as $100 for every barrel of crude. In the months of February and March, we were short, we no longer have the resources, the foreign exchange to bring in refined fuel products. And our economy is shrinking.
“We appreciate the fact that the decision is going to affect everybody. We appreciate what we are going through, but Nigerians should also know that the government has the responsibility at times to take very difficult decisions. So, it is not always about popularity,” Mohammed said.
Also speaking, Ngige said government was ready to discuss with all groups aggrieved by the new fuel price regime.
When asked why government was selective in its talks with labour groups, he replied: “We are trying to bring them under one roof on an issue that concerns all Nigerians. We wanted to speak to the sensitive sectors of the economy. That is why we brought them together.”
Ngige said that government had agreed to meet some of the demands by labour, one of which was the re-constitution of the board of the Petroleum Products Pricing Regulatory Agency (PPPRA).
He said that a 15-man committee had been set up by government to look into the demands of labour.
Ngige also said that the PPPRA board would be constituted in the next two weeks.
Fashola said government was encouraging industrialists to invest in infrastructure and would in return be considered for tax breaks.
In line with this policy, the minister said that a construction firm owned by Dangote Group had agreed to construct the Obajana-Kabba Road in Kogi State.
He said: “We presented a memo to council for consideration. The memo seeks to take benefits of the existing policy and regulation. It seeks to take benefits of tax policies, tax laws for the purpose of using them to drive infrastructure development renewal.
“So we presented a proposal by one of the subsidiary of Dangote group, a construction company, for the construction of a section of Lokoja-Obajana-Kabba-Ilorin, specifically the section between Obajana-Kabba road using cement as demonstrative of how perhaps we should continue to build going forward in order to reduce maintenance on the road and the company proposing to fund the construction of that section of the road in exchange for some tax remissions.”
Fashola pointed out that ordinarily, companies ought to pay income tax, adding that “there are existing policies in our laws, which enable government to consider and give tax incentives”.
According to him, “Council considered and approved the proposal for Dangote Construction Company to build that section of the road because the tonnage of cement being produced from the factory has increased, and the traffic in that area has increased, there has been unfortunate accidents also.
“It is a total economic policy, which council considered and approved because it gives support to industry, it enables us to take benefit of our tax law to renew infrastructure at a time where we are really challenged for resources to finance all our routes.
“It also enables us to save lives by quickly and urgently rebuilding that road so that other commuters who also depend on that road for their livelihood would also benefit from the road.”
The minister said that the policy was not just about Dangote but “an existing tax policy that a corporate or individual that makes investment on the infrastructure of a public nature should be entitled to make claims for remission on its income tax obligation”.
According to him, even as an individual, anyone is entitled to make this claim if the infrastructure goes through this type of process and is approved by government.
Fashola said: “So the details are that about 30 per cent income tax obligation spread over time. It doesn’t mean they won’t pay tax. They will continue to pay their tax obligation but they will get remission for making this investment because ultimately the road doesn’t belong to them but to government and it is for the benefits of Nigerians. So it is like credit advance to government.”
The Malami said FEC approved his memo on ensuring uniformity in payment and settlement processes in the financial system in order to block leakages in ministries, departments and agencies (MDAs).
In this regard, he said his ministry would prepare a draft bill and forward it to the National Assembly to make it a law.
He also said he gave a report on the recent UN Habitat Conference in Abuja that was attended by ministers of environment from across Africa.