The Nigeria Governors’ Forum has rejected allegations that state governments have failed to account properly for increased funds received following the removal of petrol subsidy, while backing a proposed nationwide Compressed Natural Gas transport programme aimed at reducing transport fares and easing the cost of living.
Bayelsa State Governor, Senator Douye Diri, stated the Forum’s position while responding to journalists after the third meeting of the NGF on Thursday.
Diri, who read the communiqué issued at the end of the meeting, was asked whether the governors had discussed the continuing controversy surrounding the removal of fuel subsidy, including calls by some political actors for its restoration and questions over how states had utilised increased revenues since the policy took effect.
According to him, the governors addressed the economic impact of subsidy removal partly through discussions on the proposed National Affordable CNG Transit Programme, which is designed to take advantage of the lower operating cost of CNG to reduce transportation fares.
“Now, these are part of the issues that have been addressed, particularly with the number two that I just talked about today about transportation fares,” Diri said.
The governor argued that transportation costs are central to the wider cost-of-living challenge because increases in the cost of moving people and goods are eventually reflected in the prices of food and other commodities.
“And you see that the rise in the cost of every other thing is also hinged on the increase in transport,” he said.
Diri said the governors were looking towards collaboration with the private sector to expand the use of CNG, which he described as cheaper than petrol, with the expectation that lower operating costs would translate into reduced fares.
“And it will have a multiplier effect on every other sector,” he said.
He added that the ultimate objective of interventions following subsidy removal should be to reduce the burden on ordinary Nigerians.
“And that’s because there is now the removal of subsidies. And the impact is expected to be on our people the very common man that we all talk about,” Diri said.
Asked directly whether the governors accepted criticism that sub-national governments had not sufficiently accounted for funds received following the removal of subsidy, Diri rejected the allegation.
“That cannot be true. That cannot be true. But we’ll leave that debate for another day,” he said.
“Transportation is key. Transportation is key to several other factors,” he said.
“Transportation is key. Transportation is key to several other factors,” he said.
Using food prices as an example, the governor said traders and producers routinely factor transport expenses into the prices ultimately paid by consumers.
“Say, for instance, you are talking about foodstuffs — increase in the cost of foodstuffs. They will tell you that ‘I’m moving from point A to point B, the transport cost is XY.’
“And so for that reason, the cost of my yam, the cost of my garri, this…” he said.
Diri maintained that bringing transport fares down would consequently reduce pressure across several sectors.
“And so by the time you reduce the cost of transport, as I said earlier, it will have a multiplier effect on several other,” he added.