The Social Democratic Party (SDP) vice-presidential candidate, Dr Usman Bugaje, says the debate over fuel subsidy removal should focus less on whether subsidies are retained or abolished and more on how to reduce the cost of energy for Nigerians.
Bugaje, who is the running mate to the SDP presidential candidate, Adewale Adebayo, said previous administrations had failed to resolve the subsidy controversy because of a lack of creative and scientific approaches to reducing energy costs.
Speaking in an interview with ARISE NEWS on Wednesday, Bugaje said the cost of energy was one of the most important factors affecting production, transportation and the profitability of businesses.
He said, “Now, let me first say I’m very happy that we’ve started early on some of these big ideas, because the cost of energy is one of the most fundamental factors in the process of production, and therefore it is something that every government would want to prioritise, because the cost of fuel and energy generally is going to affect transportation, is going to affect the actual cost of production in the industries.
“It’s a very, very important factor in the process of production, and therefore it’s important that we get a very clear view of what kind of thing. Previous governments have been basically playing politics with this issue, and because our political culture does not prioritise knowledge, a lot of governments and a lot of experts in the petroleum economics, they have developed different types of formula where you can actually reduce the cost of energy and make production cheaper, and therefore make profit margins bigger, increasing prosperity, and the rest of it.”
Bugaje said the SDP’s policy approach would not be centred on the conventional argument over whether fuel subsidy should be removed or retained, but on finding alternative ways to make energy cheaper.
He said, “And I think if you read our document, and which we will soon be unveiling, we have a policy document, the SDP presidential ticket, you will see that our focus is not so much on whether you remove subsidy or you don’t remove subsidy. Our focus is how do you make energy cheaper?
“Now, this is because we ask the fundamental question, which most people don’t seem to ask. What exactly is the problem for which subsidy is a solution? When you look at that question, you come to the basic answer that what you want is to make energy cheaper.
“The next question is, what other ways are there other than subsidy that can make energy cheaper? There are other ways, and like I said, a lot of this is available in the research that economists have done, especially petroleum economists, and therefore what we want to do is to bring the cost of energy down without repeating the mess around subsidy.”
According to him, the country’s inability to settle the subsidy question was linked to a failure by successive administrations to explore other options for lowering energy costs.
He said, “So the issue of subsidy is there because our politicians have not been able to think creatively to produce or to bring about other ways of making energy cheaper, and if you are stuck with only one out of many other ways, then you’ll be stuck.
“If there is any problem with subsidy in that shape and form that it has been in Nigerian politics, then you’ll continue to repeat the same mess, and you can see that right from the time of Jonathan, through the time of General Buhari, through the time of the current president.
“We have not been able to really resolve the issues, whether you pay subsidy or you remove subsidy, not much has actually changed. So I think what is important and what we are trying to do is to address the question of the cost of energy, and we have specified ways to do that.”
Bugaje identified increased local refining as one of the measures that could reduce energy costs, arguing that repairing existing refineries and encouraging private investment would reduce dependence on imported refined petroleum products.
He said, “For example, if you do local refining rather than importation, in other words, you fix refineries, you encourage private sector to invest in the field, that in itself will bring the cost of energy down.
“Then you look at the transportation. You look at so many other factors that affect the cost of energy, and you address them one after the other. At the end of the day, you will end up bringing down the cost of energy.”
He also called for a more scientific approach to tackling the country’s energy challenges, while identifying corruption as a major factor undermining efforts to reduce both energy and governance costs.
He said, “So we are trying to be more scientific in the approach rather than just the empty debate, and certainly the most important thing in bringing down the cost of energy, not only the cost of energy, the cost of governance, is to address the issue of corruption.
“Because as many of you would have reported, the subsidy issue is surrounded with a lot of cases of corruption, and actually the corruption element that has been taking away a lot of huge amount of public resources, which would have otherwise been invested into human capital development, which is basically what we require, because we have to move from the regular economy to knowledge economy.
“That’s the direction the world is moving. And if you are going to create a knowledge economy, then you have to develop your human capital, which is the field of health and education.”
On the SDP’s plan to tackle poverty, Bugaje said the party had prioritised the issue in its manifesto, which he said was titled “Goodbye to Poverty”.
He identified poor education, inadequate skills, unemployment and low agricultural productivity among the factors driving poverty in Nigeria.
He said, “If you look at our document, in fact, the title that we have given the policy document is actually Goodbye to Poverty, meaning we have prioritised the issue of poverty.
“The issue of poverty is basically the causes or the drivers of poverty are numerous. So the first thing is we identified those factors that promote poverty. One of them is poor education, which limits the ability of the individual to actually earn a living.
“So we are going to boost education, especially the acquisition of skills. We have a large skills gap in Nigeria, and we have a large manpower. We have the capacity to export skills to the rest of Africa, even Europe, and even the Middle East.
“And therefore, one of the first thing is to empower the individual through the acquisition of skills. And things are a lot easier now because the IT skills, which is where the world is moving towards, are easy to impact, especially with the development of technology.
“So even the ability or the availability of the broadband, the access to the internet, we have listed in that document a number of things to do in terms of skills acquisition.”
Bugaje also said agriculture would be a major priority under an SDP government, arguing that Nigeria had significant untapped agricultural potential.
He said, “We also need to make sure that we create jobs. Now, one of the things we started with as first priority is agriculture. In agriculture, we have a large arable land, and the arable land that Nigeria has now so far utilised is barely about 40% of what we can use in terms of agriculture.
“And even in that 40%, the level of productivity is very low. In many agricultural products that we produce, we are doing very low. Take tomatoes, for example.
“The African average for tomatoes is 19 to 20 metric tons per hectare. The Nigerian production is basically between five to six. Now, you can boost that capacity to go, in fact, beyond the African average because a small country like Cuba is doing 120 metric tons per hectare, and they are prepared to share that technology with us.
“So if we are able to acquire that, we can do quite a lot. There is an institution in Accra, which is an African-led institution, Forum for Agriculture Research in Africa. Recently, they did some event here in Abuja.
“They have a lot of research. They have a lot of connections. So these are the kind of things we need to harvest to be able to boost our production so that we can actually make our production three, four, five times.”
He cited Rwanda as an example of how agricultural productivity could be significantly increased through targeted reforms and improved production methods.
Bugaje said, “And I’ve seen that in Rwanda. Rwanda, before the genocide, their productivity is very low. After the genocide, with the coming of Kagame and the stabilisation, they went into improving their agriculture, and they doubled, more than doubled.
“They multiplied their production about five times. So it’s doable. By doing that, you now increase the prosperity of the farmer.”
He further argued that developing agricultural value chains could create more jobs and reduce waste by ensuring that agricultural products and by-products were processed into commercially valuable goods.
He said, “But more than that, we need to fix the different value chains. If you take the livestock value chain, for example, what you are going to produce from a cow is not just meat. Everything in a cow is something that can be turned into one product after the other.
“The blood, the skin, the bones, everything. There is nothing in the body, even the horns, even the hooves. So by the time you fix that value chain, you create a number of industries where you produce jobs for people.
“So you can see that even in agriculture, you can multiply the jobs available 10 times. But because we are not doing these things, we are stuck with all this. We waste a lot of things that the world has turned into something useful.”
On measures beyond local refining to reduce the price of petroleum products, Bugaje said the SDP would examine the entire energy pricing structure and other factors that contribute to the final cost paid by consumers.
He said, “Now, local refining, like I said, would certainly bring price down because you see that even freight to bring in fuel from refined industries outside the country.
“And of course, you are letting others to take away your jobs, the jobs of young people who would have been busy if there’s a local refining.
“Now, beyond local refining, we are going to also look at the pricing itself, because again, energy is not just fuel. Remember, there’s gas.
“And by combining gas into the energy, so we are going to look at the pricing and make sure that the pricing is such that there will be prosperity for anybody who is using energy, either for transportation, like you have seen, if we take into consideration all the factors that add up to the price of fuel, we can address them one after the other in a way that will make sure we intervene where necessary.
“And if we have to intervene to bring down the cost, it will be done very precisely, and it will be done transparently in such a way that it will not be an avenue for this corruption cartel to now take away whatever gains that is supposed to translate to the ordinary person who will be using energy for transportation or for any other form of business.”
Bugaje said the SDP would unveil further details of its policy proposals as the party seeks to persuade Nigerians ahead of the 2027 general election.
Boluwatife Enome
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