US berates Nigeria over fuel subsidy, electricity tariff

The United States, yesterday, disclosed that Nigeria’s inability to eliminate subsidy on petroleum products and failure to hands off the fixing of electricity tariffs is hampering the provision of critical social infrastructure in the country.


Speaking at the 10th anniversary colloquium of the Nigerian Development Finance Forum, organized by Financial Nigeria Magazine, the US Ambassador to Nigeria, Mr. Stuart Symington blamed the Federal Government’s inability to discontinue subsidy and allow market forces determine electricity tariffs for Nigeria poor social service delivery system.

Symington, who was represented by Country Mission Director of the US Agency for International Development, USAID, Mr. Stephen Haykin, also attributed the low investment in the social services sector by government at all levels on low revenue from taxes and inefficient tax system.

According to him, the decision of the country to continue to transfer public funds to keep petrol pump price at lower levels, as well as electricity rates below cost-recovery levels, meant that less funds are available to fund education, health care and other social sector services.

He said, “One proximate cause of poor health, education and nutrition standards is low public expenditures. This in turn is related to very low public revenues due in fact to low tax rates and weak systems for tax collections.

“Low social spending is also as a result of transfers from government to petroleum and power sectors because fuel and electricity tariffs are below cost recovery levels.

“Fiscal, trade and other micro-economic policies tend to act as breaks on private sector initiatives on economic growth. Weak governance due to inadequate capacities or lacks of checks and balances also slows social and economic development.”

He, however, argued that the conflicts across the country might also be responsible for the country’s poor social development.

Also speaking, former Minister of State for Health, Mr. Muhammed Pate, berated Nigeria’s political class for failing to make decisions that would attract the much-needed investments in critical sectors of the economy.

According to him, the country’s leaders had consistently made choices that were not in the interest of the country but themselves, stating that these choices had denied the country investments in the education and growth of its children.

He said Nigeria had wasted financial resources on frivolous expenditures, while he accused the current administration of towing the same path and repeating the mistakes of the past administration.

He said, “After extracting almost a trillion dollars’ worth of oil since our national independence, we have a situation where poverty is going on. We have effectively squandered an opportunity to utilise the natural resources that we obtain purely by chance, not by hard work.

“Instead of investing to uplift our people’s lives, our political elites by commission or omission chose the path of short-term comfort and purchase of loyalty through economically unwise or corruption riddled national expenditure at the expense of economically sound investments in both human and physical aspects to transform our nations.”

He further stated that a country seeking to realise its demographic dividends, must first undergo demographic transition, meaning a shift from high fertility and high child mortality to relatively lower fertility and child mortality.

He said, “Nigeria’s demographic transition is slow, variable and achieving the dividend from the population is not guaranteed. Childhood development is going in the wrong direction particularly in northern Nigeria.

“Some areas in the security challenged north east, stunting is more than 60 per cent among children under-five while over more than 40 per cent of Nigeria’s children under-five are stunted.”