Premium Essay

Fuel Subsidy and the Loss of Jobs and Investments in Nigeria

In: Business and Management

Submitted By solujobi
Words 2058
Pages 9
FUEL SUBSIDY AND THE LOSS OF JOBS AND INVESTMENTS IN NIGERIA

This issue of deregulation of fuel prices and the downstream Oil and Gas industry is understandably one on which much debate is going on. Let me start by stating very early that I have nothing against subsidies per se. I am for subsidizing education, healthcare, rural agriculture, rural power etc. I however have everything against a subsidy that is neither creating skills nor building industry. I am against a subsidy that stifles investments and job creation in Nigeria but rather exports jobs and puts stupendous wealth in the hands of a few traders. Let me state upfront that I have spent a better part of my more than two decades of working in a management consulting career advising clients in the oil and gas industry. I have more than an average understanding of the issues facing the industry and I am convinced that unless we get private capital and expertise and a decent regulator into the downstream industry we cannot solve the problem of local value addition, investments and sustainable employment. The problem off course is that no serious investor will put money into an industry where price is set below cost of production and supply.
Most Nigerians really do not know how bad the situation is in the government monopoly controlled downstream sector. An industry that should be employing a significant number of our engineering graduates and technicians yearly employs almost none. Until a few years ago the average age of staff in the downstream oil and gas industry was close to 50! You can work the math out. It means that for at least 20 years, no new blood was infused in reasonable numbers. Now this should be one of the largest employers of labour in our country. A healthy downstream oil and gas industry in Nigeria should be supplying the bulk of fuels for Sub-Saharan Africa. Indeed, World Bank…...

Similar Documents

Free Essay

Fuel Subsidy Removal

...FUEL SUBSIDY REMOVAL AND THE NIGERIAN ECONOMY (A CASE STUDY OF ABAKILIKI LOCAL GOVERNMENT AREA, EBONYI STATE) BY NKWAGU OLUCHI WINIFRED PA/2008/182 DEPARTMENT OF PUBLIC ADMINISTRATION FACULTY OF MANAGEMENT AND SOCIAL SCIENCES CARITAS UNIVERSITY, AMORJI-NIKE, ENUGU. ENUGU STATE AUGUST 2012 1 TITLE PAGE FUEL SUBSIDY REMOVAL AND THE NIGERIAN ECONOMY (A CASE STUDY OF ABAKALIKI LOCAL GOVERNMENT AREA, EBONYI STATE) BY NKWAGU OLUCHI WINIFRED PA/2008/182 A RESEARCH PROJECT PRESENTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF BACHELOR OF SCIENCE (B.SC.) DEGREE IN PUBLIC ADMINISTRATION DEPARTMENT OF PUBLIC ADMINISTRATION, FACULTY OF MANAGEMENT AND SOCIAL SCIENCES, CARITAS UNIVERSITY, AMORJI-NIKE, ENUGU, ENUGU STATE. AUGUST 2012 2 CERTIFICATION This is to certify that Nkwagu Oluchi Winifired with Registratoin Number PA/2008/182 has successfully carried out a research work on “Fuel Subsidy Removal and the Nigerian Economy (A case Study of Abakaliki Local government Area, Ebonyi State.) in partial fulfillment of the requirement for the award of Bachelor of science (B.Sc.) degree in Public Administration ---------------------------------Mr. M. O. Ugada (Project Supervisor) -------------------------Date --------------------------------Mr. M. O. Ugada (HOD Public Adminstration) ---------------------------Date -------------------------------External......

Words: 26167 - Pages: 105

Free Essay

The Word

...debate on the removal of fuel subsidy with which the country has been bedeviled in previous couple of months; the issue of whether the 2012 Appropriation Bill is a budget of fiscal consolidation or retrogression is as timely as it is topical. Transformation is a huge word that the Jonathan administration thoughtlessly uses to describe its aspirations. Is there anything transformational about the 2012 Budget proposals? In the course of presenting the Draft Budget, President Jonathan in paragraph 1 of 81 of his address states “this budget is a stepping stone to the transformation of our economy and country in our walk to economic freedom” and concludes in paragraph 76 thereof that “Mr. Senate President……the Proposal I lay before you this day seeks to sustain sound micro-economic growth that will translate to achieving socio-economic transformation, and gainful employment for our people”. Meanwhile, and perhaps by divine providence, in the afternoon of the same Tuesday, 13th of December; the News Agency of Nigeria (NAN) reported that Nigeria’s biggest power generating plant, Egbin thermal station, with an available capacity of some 1,080MW out of the nation’s meagre total of about 4000MW has been shut down on account of poor maintenance! Thus, whilst the President was preaching a sermon of transformation in the National Assembly, Nigerians were simultaneously experiencing practical retrogression. Worse still, the raging debate on the removal of fuel subsidy to which the......

Words: 3932 - Pages: 16

Premium Essay

New Growth Theory

...and funded by the European Union and the German Federal Ministry for Economic Cooperation and Development (BMZ). The authors would like to thank the GIZ Nigeria team for having entrusted this highly relevant subject to GOPA-­ International Energy Consultants GmbH, and for their extensive and dedicated inputs and guidance provided during implementation. The authors express their gratitude to all project partners who provided particularly valuable and interesting insights into ongoing activities during the course of the project. It was a real pleasure and a great help to exchange ideas and learn from highly experienced management and staff and committed representatives of this programme. How to Read Citations Bibliography is cited by [Author; Year]. Where no author could be identified, we used the name of the institution. The Bibliography is listed in Chapter 10. Websites (internet links) are cited with a consecutive numbering system [1], [2], etc. The Websites are listed in Chapter 11. 3 Imprint Published by: Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH Nigerian Energy Support Programme (NESP) 2 Dr Clement Isong Street, Asokoro Abuja / Nigeria Contact: Daniel Werner (daniel.werner@giz.de) Phone: + 234 8057601986 Federal Ministry of Power Federal Secretariat Complex Shehu Shagari Way, Maitama Abuja / Nigeria Contact: Engr. Faruk Yusuf Yabo (fyyabo@yahoo.com) Maps: The geographical maps are for informational purposes only and do not constitute......

Words: 64608 - Pages: 259

Free Essay

Marketin Strategy of Bajaj

...dominantly present in Africa and Latin America with increasing market share every year. Although Bajaj already exporting their product in Nigeria, but we think that they should plan to establish a manufacturing plant in that country. Pro’s and Con’s of entering the market ➢ The two wheeler market runs on high economies of scale. So it is very essential to capture the mass target market. Else, huge loss may occur. ➢ The need for technical expertise is high. ➢ Owning a strong distribution network is important and is very costly. ➢ Suppliers of auto components are fragmented and are extremely critical for this industry since most of the component work will be outsourced. Proper supply chain management is a costly yet a critical need. ➢ The industry rivalry is extremely high with any product being matched in a few months by competitor. This instinct of the industry is primarily driven by the technical capabilities acquired over years of gestation under the technical collaboration with international players. As Bajaj, along with its competitors, such as Hero Honda, TVS, Yamaha, are active at multipoint competitions; it is likely for the competitors to enter if Bajaj is successful at Nigeria. ➢ Petrol prices are always fluctuating in Nigeria. But with the recent change in the policy to reduce the subsidy, the prices of petrol will remain constant at the current prices. This will have a positive effect on purchases of two wheelers. ➢......

Words: 7333 - Pages: 30

Premium Essay

Case Study Shell

...In the first case we observe company which is the main producer of drinks in the world and which has huge investment portfolio and real power in corporate social responsibility. In other word it is highly aimed to follow «best practices» of corporate social responsibility initiatives and sustainable development measures. Corporate social initiatives slightly vary as companies operate in different industries. Introduction of the Royal Dutch Shell Corporation. According to the words of CEO Peter Voser who introduce sustainability report of 2010 year the aim of the business is to heel meet the energy needs of society in ways that are economically environmentally and socially responsible. These goals are directly projected to all plans and affiliates which are scattered in 90 countries with 93000 employees. The structure of the Shell group is divided by three main branches: 1. Upstream, 2. Downstream, 3. Projects and technology. Upstream consists of two companies: Upstream International and Upstream American which are responsible for searching and discovering new oil and gas, extracting oil from oil sands for conversion into synthetic crudes. Wind power is part of activities of Upstream. Upstream International coordinates sustainable development policies and social performance across the company. Downstream manufactures, supplies and markets oil products and chemicals worldwide. Supply and manufacturing business consists of refineries, supply and......

Words: 3013 - Pages: 13

Premium Essay

Business

...to the energy used to produce it. As the ratio increases, the net energy also rises. When the ratio is less than 1, there is a net energy loss. Net energy ratios for various energy systems over their estimated lifetimes differ widely Fig. 13-2a, p. 301 Fig. 13-2b, p. 301 Fig. 13-2c, p. 301 Fig. 13-2d, p. 301 Energy resources with low or negative net energy need help to compete in the marketplace •  Any energy resource with a low or negative net energy ratio cannot compete in the open marketplace with other energy alternatives with higher net energy ratios unless it receives financial support from the government (taxpayers) or other outside sources of funding. –  For example, the low net energy yield for the nuclear power fuel cycle is one reason why many governments throughout the world must heavily support nuclear power financially to make it available to consumers at an affordable price. Section 13-2 WHAT ARE THE ADVANTAGES AND DISADVANTAGES OF FOSSIL FUELS? Fossil fuels supply most of our commercial energy •  The direct input of solar energy produces several other forms of renewable energy resources that: wind, flowing water, and biomass. •  Most commercial energy comes from extracting and burning nonrenewable energy resources obtained from the earth’s crust. –  87% from carbon-containing fossil fuels (oil, natural gas, and coal). –  6% from nuclear power. –  8% from renewable energy resources—biomass, hydropower, geothermal, wind,......

Words: 7315 - Pages: 30

Premium Essay

South Africa

...background of the country, develop PESTLE analysis, look at the balance of payments as well as trade balance, examine exchange trade policy and growth rate of the economy. In conclusion we will provide forecast for country's development. Today South Africa's trade and industrial policy is moving away from a highly protected, inward looking economy towards an internationally competitive economy, capitalizing on its competitive and comparative advantages. From the period of apartheid, it has made great progress in dismantling its old economic system, which was based on import substitution, high tariffs and subsidies, anticompetitive behavior, and extensive government intervention in the economy. The leadership has moved to reduce the government's role in the economy and to promote private sector investment and competition. It has significantly reduced tariffs and exports subsidies, loosened exchange controls, cut the secondary tax on corporate dividends, and improved enforcement of intellectual property laws. We can help you to write your essay! Professional essay writers Our writers can help get your essay back on track, take a look at our services to learn more about how we can help. Essay Writing Service Essay Marking Service Place an Order  The macro-economic policy includes 5 macro objectives: Economic growth Increasing employment A positive trade balance (increasing exports above imports) Combating inflation Equity The achievement of these objectives is very......

Words: 7363 - Pages: 30

Premium Essay

Gallon Has Arrived

...said the research showed governments should focus policy on ensuring poorer children gain better education and the supporting people into employment. As inequality has moved higher up the political agenda in rich countries, there has been a flurry of research papers looking into the link between inequality and growth. Clear conclusions have been difficult to achieve because economic theory is ambiguous and the subject has been plagued by research finding spurious associations in the data rather than meaningful causal relationships. Higher inequality can hinder growth by destroying trust in society, hitting investment in skills and reducing demand growth for goods and services from poorer families who tend to spend more of their incomes. But it also provides greater incentives for people to strive to climb the ladder of opportunity and can provide necessary savings to finance investment and growth. Janet Yellen, chairwoman of the Federal Reserve, said this autumn that these conflicts of theory ensured that “society faces difficult questions of how best to fairly and justly promote equal opportunity”. Statistical results showing inequality as bad for growth have also come under surprise fire from professor Paul Krugman, the Nobel Prize-winning economist and columnist. He said: “I’m actually a sceptic on the inequality-is-bad-for-performance proposition — not hard line against it, but worried that the evidence for some popular stories is weaker than I’d like”. The OECD......

Words: 3840 - Pages: 16

Premium Essay

Oil Pricing

...oil-import bill. It is estimated that the loss of GDP averages 0.8% in Asia and 1.6% in very poor highly indebted countries in the year following a $10 oil-price increase. The loss of GDP in the Sub-Saharan African countries would be more than 3%. 2 IEA/(2004) World GDP would be at least half of one percent lower – equivalent to $255 billion – in the year following a $10 oil price increase. This is because the economic stimulus provided by higher oil-export earnings in OPEC and other exporting countries would be more than outweighed by the depressive effect of higher prices on economic activity in the importing countries. The transfer of income from oil importers to oil exporters in the year following the price increase would alone amount to roughly $150 billion. A loss of business and consumer confidence, inappropriate policy responses and higher gas prices would amplify these economic effects in the medium term. For as long as oil prices remain high and unstable, the economic prosperity of oil-importing countries – especially the poorest developing countries – will remain at risk. The impact of higher oil prices on economic growth in OPEC countries would depend on a variety of factors, particularly how the windfall revenues are spent. In the long term, however, OPEC oil revenues and GDP are likely to be lower, as higher prices would not compensate fully for lower production. In the IEA’s recent World Energy Investment Outlook, cumulative OPEC......

Words: 6052 - Pages: 25

Free Essay

Hr Practices in Tata Consultancy Services

...to the recession in the West. There has been a significant drop in the new hiring which is a cause of great concern for us. Some companies have laid-off their employees and there have been cut in promotions, compensation and perks of the employees. Companies in the private sector and government sector are hesitant to take up new projects. And they are working on existing projects only. Projections indicate that up to one crorepeople could lose their jobs in the correct fiscal ending March. The one crore figure has been compiled by Federation of Indian Export Organizations (FIEO), which says that it has carried out an intensive survey. The textile, garment and handicraft industry are worse affected. Together, they are going to lose four million jobs by April 2009, according to the FIEO survey. There has also been a decline in the tourist inflow lately. The real estate has also a problem of tight liquidity situations, where the developers are finding industry, investment banking and other industries as well are confronting heavy loss due to the fall down of global economy. Federation of Indian chambers of Commerce and Industry (FICCI) found that faced with the global recession, inventories industries like garment, gems, textiles, chemicals and jewellery had cut production by 10 per cent to 50 per cent. The official designation of recession may not come until after we are in a recession for six months or even longer. FACTORS AFFECTING RECESSION: (A) Stages of Market......

Words: 10693 - Pages: 43

Premium Essay

Fefadsf

...Grishchenko T. Saint-Petersburg 2012 Contents Contents 2 Economic inspection in South Africa 3 The New Growth Path and Industrial Policy Action Plan 8 Investment promotion and facilitation 12 South Africa’s investment landscape 16 Government management of incentives program 19 Catalogue of incentives 20 About PEST and SWOT 22 PEST analysis 23 SWOT Analysis: 26 Соnclusion 28 Sources 30 Economic inspection in South Africa Trade and investment policies are critical for addressing the development challenges of Africa and achieving sustainable economic growth for the region. EDIP's work is broadly divided into three streams: (1) Research on global economic governance in order to understand the broader impact on the region and identifying options for Africa in its participation in the international financial system. (2) Issues analysis to unpack key multilateral (World Trade Organisation), regional and bilateral trade negotiations. It also considers unilateral trade policy issues lying outside of the reciprocal trade negotiations arena as well as the implications of regional economic integration in Southern Africa and beyond. (3) Exploration of linkages between traditional trade policy debates and other sustainable development issues, such as climate change, investment, energy and food security. SAIIA (South African Institute of International Affairs) gratefully acknowledges the Swedish International Development......

Words: 6928 - Pages: 28

Premium Essay

Hunger

... 2. Food and nutrition insecurity - a consequence of structural inequities in the global economy ................................................................................................... 44 3. Undernutrition as a contributing cause of deprivations targeted by other MDGs.......... 45 II. Successful country experiences in reducing hunger and undernutrition: Evidence, factors and lessons....................................................................................... 46 1. Success factors............................................................................................................. 46 (a) Enabling environment for equitable economic growth and human well-being ........ 46 (b) Outreach to the most vulnerable and investment in the rural poor ......................... 47 (c) Protection of food security gains in times of crisis .................................................. 49 (d) Investing in sustainability ........................................................................................ 50 2. Interventions that work .................................................................................................. 50 (a) Nutrition and health-based prevention and treatment approaches ......................... 51 (b) Social protection and food and nutrition safety nets ............................................... 53 (c) Smallholder farmer productivity-enhancement approaches ................................... 54 (d) Multi-sector approaches......

Words: 35418 - Pages: 142

Free Essay

Iata Annual Review

...Feature: What’s on offer? Cost efficiency Feature: Why does economic regulation matter? Industry settlement systems Aviation solutions Note: Unless specified otherwise, all dollar ($) figures refer to US dollars (US$). This review uses only 100% recycled paper (Cyclus Print) and vegetable inks. # IATA Membership as of 1 May 2012 ABSA Cargo Airline Adria Airways Aegean Airlines Aer Lingus Aero República Aeroflot Aerolineas Argentinas Aeromexico Aerosvit Airlines Afriqiyah Airways Aigle Azur Air Algérie Air Astana Air Austral Air Baltic Air Berlin Air Canada Air China Air Corsica Air Europa Air France Air India Air Koryo Air Macau Air Madagascar Air Malawi Air Malta Air Mauritius Air Moldova Air Namibia Air New Zealand Air Nigeria Air Niugini Air Nostrum Air One Air Pacific Air Seychelles Air Tahiti Air Tahiti Nui Air Transat Air Vanuatu Air Zimbabwe Aircalin Airlink Alaska Airlines Alitalia All Nippon Airways AlMasria Universal Airlines ALS American Airlines Arik Air Arkia Israeli Airlines Armavia Asiana Airlines Atlas Air Atlasjet Airlines Austrian Avianca Azerbaijan Airlines B&H Airlines Bahrain Air Bangkok Airways Belavia—Belarusian Airlines Belle Air Biman Binter Canarias Blue Panorama Blue1 bmi British Airways Brussels Airlines Bulgaria air C.A.L. Cargo Airlines Cargojet Airways Cargolux Caribbean Airlines Carpatair Cathay Pacific China Airlines China Cargo Airlines China Eastern China Southern Airlines Cimber Sterling Cirrus Airlines CityJet Comair......

Words: 17801 - Pages: 72

Premium Essay

Maths and Statistics

...NIGERIA MILLENNIUM DEVELOPMENT GOALS REPORT 2010 © 2010, Government of the Federal Republic of Nigeria TABLE OF CONTENTS Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 Acronyms and abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 Executive summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 MDGs status at a glance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12 Goal 1 – Eradicate extreme poverty and hunger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13 Goal 2 – Achieve universal primary education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17 Goal 3 – Promote gender equality and empower women . . . . . . . . . . . . . . . . . . . . . . . . . . . .22 Goal 4 – Reduce child mortality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 Goal 5 – Improve maternal health . . . . . . . . . . ....

Words: 21527 - Pages: 87

Premium Essay

Economy of India

...reforms, the country's economic growth progressed at a rapid pace with very high rates of growth and large increases in the incomes of people. [12] India recorded the highest growth rates in the mid-2000s, and is one of the fastest-growing economies in the world. The growth was led primarily due to a huge increase in the size of the middle class consumer, a large labor force and considerable foreign investments. India is the nineteenth largest exporter and tenth largest importer in the world. Economic growth rates are projected at around 7% for the 2011-12 fiscal year.[13] Contents * 1 Overview * 2 History * 2.1 Pre-colonial period (up to 1773) * 2.2 Colonial period (1773–1947) * 2.3 Pre-liberalisation period (1947–1991) * 2.4 Post-liberalisation period (since 1991) * 3 Sectors * 3.1 Industry and services * 3.2 Agriculture * 3.3 Banking and finance * 3.4 Energy and power * 3.5 Infrastructure * 4 External trade and investment * 4.1 Global trade relations * 4.2 Balance of payments * 4.3 Foreign direct investment * 5 Currency * 6 Income and consumption * 7 Employment * 8 Economic trends and issues * 8.1 Agriculture * 8.2 Corruption * 8.3 Education * 8.4 Infrastructure * 8.5 Economic disparities * 9 See also * 10 Notes * 11 References * 12 Further reading * 13 External links | Overview A combination of protectionist, import-substitution, and Fabian......

Words: 9405 - Pages: 38