…Says current subsidies cannot be sustained
Vice President Yemi Osinbajo, on Monday, disclosed that the Federal Government cannot sustain the current subsidy regime in power sector, hence, there is the need to increase the tariff.
Osinbajo made the statement at the 6th Presidential Quarterly Business Forum for Private Sector Stakeholders in Abuja.
“Listening to questions concerning lower tariffs, we must pay higher tariffs, these sorts of things are inevitable. What we are trying to do is not increase tariffs for now, but how we can ensure we clean up the entire value chain. I’m sure you are aware of the Payment Assurance Guarantee which we put in place for over N700billion to ensure gas is paid for and for liquidity in the whole value chain.
“Today, we will be meeting with the World Bank on a scheme they have been working with us on to fund the entire value chain, and ensure we transit smoothly from where we are, to a much more market-determined policy for electricity. This will involve a fair amount of subsidy and help the Federal Government and World Bank are working together on that. There is no way of sustaining the current subsidies long term, but we want to ensure the process is smooth,” he said.
The vice president said Nigeria will no longer permit smuggling from neighbouring countries.
According to him, we are making the point to our neighbours, that smuggling is an existential threat, we can’t permit the level of smuggling going on.
He said Nigeria is on a journey to food security, “and to becoming a power of sorts, especially of processed agricultural products in particular.”
“We are in a special moment because the Federal Government has shown commitment towards agriculture and entire value chain. We have seen enthusiasm of all the players, including the small farmers all across the country.
“Getting feedback concerning issues that have been raised, there is cheaper credit, and the President directed that we set up a small committee to look at the issue of intervention funds in agriculture.
“It is clear, that we are not able to bring down interest rates overnight, the way out is by some kind of intervention agreement.
“I chair a committee to look at how to monitor and use intervention funds. We will ensure that the funds go to the right people and also monitor the use of the funds. We are also refining the Anchor Borrowers’ Programme, and other intervention schemes that we have,” he said.
On Apapa gridlock, he said a number of steps are being taken to ease the tension.
His words: “Dealing with the gridlock in Apapa port, the first thing to recognize is that the port is meant to be a 34 million metric tonnes capacity port. Now it is doing 80million metric tonnes, so it is obviously a port far too small for the size of business it is doing.
“We have met with all of the important stakeholders, asides from those who do their business there like Flourmills, Dangote and BUA. We have also met with the Navy, Police, NPA, Lagos State Government, all federal agencies working in the ports and port concessionaires.
“At our last meeting, we worked on a number of initiatives and agreed on a number of things that have to be done. I went personally to see for myself what was going on in the port area. There is a major problem there, but everyone has agreed on what to do and there is a plan which we are executing. Nothing would happen overnight, but we have a good plan that will make it work.
“We have taken a number of decisions; empty containers are to be relocated to holding bays, shipping companies would no longer be allowed to operate holding bays within the port, tank farms would not to be permitted within the Apapa area and process licensing access to trailer parks by NPA to commence. A task force has been set up to manage traffic within the Apapa and Tin Can Island environs.
“The PEBEC team has been monitoring what’s going on and we are watching closely to solve the problem. As you can imagine, it is a long running problem and the roads in that neighborhood are extremely bad but we are trying to fix them.
“We agreed that Dangote Group will carry out palliative works and reconstruction of some major sections of the Apapa road, which is expected to be completed by June 2018. Procurement processes have also been concluded for construction of Liverpool road to Tin Can, to Mile 2, Oworonshoki up to the toll gate.
“The Honeywell Group has committed to construct a trailer park, they have started and will complete it very shortly. BUA Group agreed to do the works around the Tin Can Island road. We have it in hand, and we are watching and following up on it.”
…Says current subsidies cannot be sustained