Saraki: New National Road Fund Bill Won’t Lead to Increased Fuel Price
MAN president: Proposed levy ill-timed
Senate President, Dr. Abubakar Bukola Saraki, at the weekend re-assured Nigerians that the proposed National Road Fund Bill being planned by the Senate would not lead to any increase in the current price of fuel.
He also hinted that the Senate would this week discuss a motion on the interest rates being charged by commercial banks on loans to customers, particularly entrepreneurs who needs borrowed funds to stay afloat and contribute to the National Gross Domestic Product (GDP).
Speaking against the backdrop of the recent wrong interpretations in the media on a recommendations by the Senate Committee on Works on the proposed bill in Ilorin, Kwara State capital, Saraki said: “The report of the Senate committee which worked on the National Road Fund Bill came from deliberations during a pubic hearing in which all stakeholders made different suggestions on how to generate funds for maintenance of the nation’s road network but that there was a consensus on the desirability of the fund and the need to ensure that the money to be generated from sale of fuel for the fund should be accommodated within the current price regime.”
He said: “This is an opportunity to clarify the inaccurate reporting. There is a bill called the National Road Funds Bill. Our roads around the country are not adequately funded.
“If we are banking on the appropriations process, we will not be able to adequately fund and refurbish our roads.
“Anybody that read the full report would have known that after the public hearing, which involved stakeholders from the road and transport industry, it was recommended that five naira from each litre of petrol should be channeled towards our roads.
“However, this is not going to be additional five naira, but five naira out of the present price of N145 that Nigerians are currently paying at the pump.”
Saraki explained: “The recommendations came from the engagement with stakeholders at the public hearing on the bill.
“One of the conditions attached to the new charges by all stakeholders was that this N5 should not be an increase, but come from what is already existing. It is believed that the existing charges in the present price regime would be reduced to accommodate the N5 Road Fund bill.
“Nigerians should be reassured that although we have not even debated these recommendations, the committees report came with a clear proviso that the N5 should come from a restructuring of the existing template, which is reshuffling the taxes in the current N145 — so that N5 out of this will always be pushed to develop existing roads and build new ones.”
Saraki added that this week, the Senate would discuss and take a decision on the interest rates being charged by commercial banks as he said the prevailing rates were too high and discouraging to genuine industrialists and entrepreneurs who needs to accommodate the cost of money alongside other costs to fix prices of goods and services.
“If we genuinely want to stimulate local manufacturing and development of the small and medium enterprises so as to generate employment and help our national economy to recover from recession, then people must be able to borrow money at reasonable interest rates. It is difficult for manufacturers to survive while borrowing at about 28 per cent,” he said.
Speaking on the journey thus far after being at the helm of the Senate and the National Assembly for the past two years, the Senate President said: “I am comfortable with the support that I have received from my colleagues. One thing that makes the 8th Senate different is that we take initiative. For example, a bill like the Petroleum Industry Bill (PIB) would have been easier to pass as an executive bill — however, based on how united we are and focused on the greater good, the passage of the PIB goes to show Nigerians the competencies of the senators of the 8th National Assembly.”
Meanwhile, the President of the Manufacturing Association of Nigeria (MAN), Dr. Frank Jacobs, said the proposal of N5 fuel levy is ill-timed and urged the lawmakers to reconsider the appropriateness of the timing of the bill and the choice of products like petrol and diesel.
He noted that its implementation would drive up inflation, further erode the purchasing power of Nigerians and frustrate the growth of the manufacturing sector.
Jacobs added that the spiral effect of the proposed N5 levy on imported petroleum products would however be “unprecedented” on the economy.
Jacobs revealed that though MAN was yet to officially meet over the issue, the proposal was not bad in its entirety.
“On the face value, the N5 levy appears harmless but a critical examination of the transmission mechanism of its economic and political implications revealed enormous resultant challenges.
“This is not because the bill is not well thought-out but the timing seems inappropriate in view of the prevailing economic circumstance of the country.
According to him the economy is still in the negative growth region and currently on a journey out of recession.
“Capacity utilisation is a little above 50 per cent, cost of production is pretty on the high side with expenses on self-generated power using diesel responsible for about 36 per cent of the total cost profile.
“Interest rate is still hovering around the 28 to 30 per cent mark and inflation is still double digit oscillating within the 17 percentile range.
“The introduction of the five Naira levy will erode the purchasing power of Nigerians and trigger high inventory of unsold manufactured products,” he said.