How sure is Sure-P?

BY YEMI OLAKITAN 

In 2012, the Federal Government had explained that subsidy removal was necessary to end the vast corruption taking place under the subsidy regime, and promised to reinvest the saved money into infrastructure, health and education. The government had to introduce a partial subsidy as a result of widespread protests that took place against the subsidy removal, and set up a fund into which the saved money would be channeled. 

This fund was called, the Subsidy Reinvestment and Empowerment Programme (SURE-P) it was charged with using the subsidy savings to invest in infrastructure and empowerment initiatives that benefit Nigerians.  With $2.5 billion having flowed into the project – and a further $1.6 billion in 2014 – what has SURE-P achieved so far? Ag. Head of Investigations, Yemi Olakitan takes a critical look at the programme, examining the controversies.

On Monday, 2 January 2012 in response to the removal of the subsidy on oil  by the Federal Government of President Jonathan on Sunday, 1 January 2012, widespread protests took place across the country. The protests was tagged Occupy Nigeria. 16 people were reportedly killed during the protests. The protest was characterized by demonstrations.

The country  is said to be the largest producer of crude oil in Africa, but still imports fuel despite producing about 2.4 million barrels of crude oil daily which is exported to be refined abroad and exported back into the country. American states person, Hilary Clinton, during a visit to Nigeria described the situation as ‘‘a clear case of mismanagement.’’

 Cheap petrol is regarded as the only benefit Nigerians receives from the state, hence the widespread disapproval. Governor of the CBN  Lamido Sanusi said the subsidy was unsustainable". The government explained that subsidy regime in which fixed prices are maintained irrespective of market realities has resulted in a huge unsustainable subsidy burden. Fuel subsidies do not reach the intended beneficiaries. Subsidy level is correlated with household income, as richer households consume larger quantities of the products.

According to the Federal Government at the time, subsidy administration is beset with inefficiencies, leakages and corruption. Subsidy has resulted in the diversion of scarce public resources away from investment in critical infrastructure, while putting pressure on government resources.  Subsidy has discouraged competition and stifled private investment in the downstream sector. Due to lack of deregulation, investors have shied away from investment in the development of refineries, petrochemicals, fertilizer plants, etc. Investigations reveal that since the year 2000, government has issued 20 licenses for new refineries, none of which has materialized into new refineries. The deregulation of the downstream sector of the petroleum industry, it was argued will lead to private sector investment in refineries and petrochemicals, which will generate millions of jobs and bring prosperity.

Huge price disparity has encouraged smuggling of petroleum products across the borders to neighboring countries, where prices are much higher. Nigeria therefore ends up subsidizing consumption of petroleum products in neighboring countries. Despite the explanations given, protesters refuse to cooperate with the government. Former President Olusegun Obasanjo had tried to remove the subsidy but have backed down because of protests and reduced it instead.

As part of palliatives aimed at cushioning the effects of the subsidy removal, the federal government had announced a ‘massive transportation scheme’ about 1600 diesel-powered mass transit vehicles, was promised to be distributed. In a similar vein, President Good luck Jonathan established the Subsidy Reinvestment and Empowerment Programme, SURE-P as a palliative measure. He inaugurated a committee to manage the Programme. The Committee had the following membership: Dr. Christopher Kolade, CON Chairman, Gen. Martin Luther Agwai (Rtd) - Deputy Chairman, Hon Minister of Finance/CME Member, Hon. Minister of Petroleum Resources Member,  Hon. Minister National Planning Member, Hon. Minister of State Health Member, Prof. Kunle Ade Wahab  and others. 

The president explained that The Subsidy Reinvestment and Empowerment Program (SURE-P) is an intervention mechanism for the nation’s development.

 ‘‘I inaugurated the board of the Subsidy Reinvestment and Empowerment Programme (SURE-P) under the leadership of Dr. Christopher Kolade. I also had the great privilege of kicking off the Public Works Women and Youth Empowerment Programme which is an intervention programme designed to employ 370,000 youths in the year 2012 with 30% of those jobs being reserved for women. This programme will also place young graduates as interns in firms and companies with a view to sharpening their skills preparatory to engaging in entrepreneurship and those firms that choose to retain these graduates will be given incentives by the Federal Government. This is only one step in government's plan to provide the enabling environment for all willing Nigerians to get to work and compliments the Youth Enterprise with Innovation in Nigeria (You Win) initiative which I launched on the 11th of October 2011.’’

According to the PDP led Jonathan’s Government, the Subsidy Reinvestment and Empowerment Programme was designed to mitigate the immediate impact of the partial petroleum subsidy removal on the population by laying a foundation for the successful development of a national safety net programme that targets the poor and vulnerable on a continuous basis.

Regrettably, SURE-P has been trailed by one controversy or the other. Chief of them was the N2.2billion SURE-P fund reportedly used for secretarial services and another N500 billion allegedly missing. According to the then Chairman, Christopher Kolade of the Sure-P committee who later resigned on the ground of old age, the media had promoted the inaccurate story that such an amount was missing from the fund. The former chairman said in an interview that it was all a widely celebrated rumour, he said,   ‘I have a grouse against the media. First of all, if you look at our accounts, our budget; you will find the amount earmarked for secretariat services, in order words, for running our offices and staff, etc nationwide for 2012. It was only N1billion, so if anybody is going to spend more than N1 billion on the secretariat, he has to go back to the National Assembly to get funds from other places to supplement the N1 billion. So, we did not have N2.2 billion. What has happened; we put down our reports to the National Assembly that so far, to that point, we had spent N220 million on secretariat services. Somebody in National Assembly read that to mean N2.2 billion. When we went to National Assembly and they said how come you spent N2.2 billion for secretariat services, I said where is that? And they said we should look at our account. We said, no, read it properly, it’s N220million. Members of the media were there. When the publications started, it was N2.2 billion they published. They did not attend to the correction that we made that it was N220 million. Until now, we are still talking about N2.2 billion. I don’t know what else my committee should do to correct this and therefore, I go back to what I said about the N500 billion allegedly missing. There are mischief makers here. There are people who are deliberately spreading wrong information because they want to create confusion.’’

Critics also accused the SURE-P of duplicating projects and defrauding the nation by making double payments for projects already embarked upon and financed by the various ministries and agencies. The National Assembly had also took a swipe at the  Subsidy Reinvestment and Empowerment Programme (SURE-P), describing it as a drain pipe on the Nigerian economy, it called on the government to scrap it if there were no improvements. The Lawmakers who expressed their lack of confidence on the activities of SURE-P stressed that the agency was a duplication of activities already carried out by existing Ministries, Department and Agencies, MDAs in the country.

The former chairman Dr. Christopher Kolade, CON who later resigned, citing old age, had explained that the SURE-P’s funds are split between the Federal Government and States and Local Government, and are used in two ways: to help fund infrastructural development; and to support social security programmes related to issues such as women and youth empowerment, unemployment, and community service. He also said the programme was an intervention mechanism aimed at helping out on government’s abandoned projects or improving on them.

Investigations revealed that, when the National Assembly asked SURE-P in November 2012 to produce its 2012 budget expenditure analysis, lawmakers were dismayed to hear that lots of the things SURE-P committee members pointed to were projects already being carried out by the Federal Government. The SURE-P board claimed to have spent N16 billion ($100 million) on the Benin Ore Shagamu road – a project for which the Federal Government had already awarded a N65.2 billion ($400 million) contract in September 2012 – and said it had contributed N9.3 billion ($57 million) to the Lagos-to-Ibadan railway – a development for which a $1.4 billion contract was signed between the Federal Government and the China Civil Engineering Construction Corporation (CCECC) in August 2012.  Senator Danjuma Goje, a member of the Senate Committee on Petroleum said, “They are not initiating any new projects, they only put money into existing projects.”

Furthermore, reports reveal that SURE-P had come under heavy suspicion of succumbing to corruption. The Kaduna State House Assembly was reported to have ordered the suspension of SURE-P in the state and constituted a committee to investigate the implementation of SURE-P’s state projects and activities. Allegations of dubious transactions and misappropriation were leveled against the programme coordinators in the state with a reported N560 million ($3.1 million) missing from the Kaduna State SURE-P coffers. 

“My opinion is this, the SURE-P programme appeared well thought through,’’ said Ezekiel Keith, who described himself as a social critic, he said, ‘SURE- P is a well structured programme that can benefit Nigerians but like always we are plagued with the Nigeria factor. ‘‘All we have seen are fine buses in Abuja, the federal capital.’’  He said, ‘‘the committee needs to do more to improve the living conditions of Nigerians in the grassroots across the nation. Millions of young Nigerians are still unemployed.’’

Dr Christopher Kolade speaking on the activities of SURE-P said the programme has been misunderstood by most Nigerians. Dr. Christopher Kolade said it is an interventionist project.

‘‘I do not know why most people are misunderstanding the word ‘’intervention.’’ The normal programme of government will be going on. How did this intervention come about? The federal government decided to de-regulate the petroleum industry.  It is the oil subsidy that provides the fund with which SURE-P carries out its project. You know that government at the beginning wanted to withdraw the entire subsidy but when there were protests, government did a partial withdrawal, so that the petroleum we have been buying N65 per litre now became N97 per litre, there was an increase of N32. We will now use the money they withdraw on meaningful projects. Government has decided what to do with the money. The money that was now going to accrue will be shared to the states and local governments. For 2012, it was calculated to amount to N180b. The federal government defines the projects we embark upon. There is a document called the SURE-P programme which guides the projects we embark upon.  Most of these projects are in categories; components.’’ he said.

 Speaking further, he said, ‘‘I have seen a lot of media comments almost insinuating that we are doing wrong projects or that we don’t know what we are doing. No, it is not true, we are an intervention body, we can only intervene the way government said we should do. The state and the Local Governments of the Federation have their own SURE-P budget and they are in sole control of it. The beneficiaries on our scheme are private sector operators as we are Federal Government Scheme; hence we operate independently from state and local government,’’ he said.

Dr, Kolade explained the committee’s involvement in road contraction. According to him, this focuses on accelerating the completion of the long standing East – West Road by the Ministry of Niger Delta Affairs (MNDA). The 338km road connects the following towns in the Niger Delta, South-South Zone:  Effurun/Warri – Ughelli – Patani – Kaiama – Mbiama – Ahoada – Elele  – Emouha  –  Choba – Port Harcourt – Onne – Ogoni – Eket  – Oron and Calabar. The SURE-P funds is managed by The Infrastructure Bank (TIB), they are responsible for monitoring the loans and payment to suppliers and operators.  Sure-P intervention in the rail subsector i.e. for the three main projects, covers: The rehabilitation of the Western line (Jebba – Kano Line Rehabilitation Project); The rehabilitation of the Eastern Line (Port Harcourt – Maiduguri Rehabilitation Project); The Nigerian Railway Modernization Project (Abuja (Idu) – Kaduna, Addendum I, Segment I)). The Western line rehabilitation consists of two (2) contracts, namely:  Contract I – Lagos – Jebba, and Jebba – Kano.  The Eastern Line Rehabilitation consists of three (3) contracts, namely: Contract 3 – Port Harcourt – Makurdi, Contract 4 – Makurdi – Kuru, Contract 7 – Kuru – Maiduguri.  There is also the Modernization Project like in Contract (1) (Idu – Kaduna), SURE-P also focuses on the completion of core road projects by the Federal Ministry of Works, spread across the six geo-political zones of Nigeria.

On his dissatisfaction with SURE-P, the Chairman of the joint Committee, Senator Magnus Abe, PDP, Rivers South-East said, “From the details presented before us here, it is believed that the performance of your 2012 budget was put at only 31 percent. You have to sit up in 2013; else, Nigerians will start losing interest in you.  Our fears are not with your credibility, but the fact that these main roads are the same also awarded by the Federal Ministry of Works during this period. The committee said however that unless the organization provides its full details of 2012 dealings, it would not debate the 2013 budget and therefore directed the chairman, Dr Christopher Kolade to furnish it with the details before it considers the next sitting date to debate on the budget.

It has also been alleged that SURE-P is well intentioned programme but is being poeticized and given a bad name by opposition politicians and that some APC states are not giving SURE-P enough public awareness in their domain yet they draw huge amount of money every month from the proceeds from the subsidy removal. They keep quiet about the gains accruing from partial fuel subsidy removal, whereas state and local governments appropriate funds from subsidy removal on a monthly basis and the federal government is ploughing back its own portion into various states and the local governments through SURE-P.

As a result the management of the Subsidy Re-investment and Empowerment Programme (SURE-P) has become a subject of accusation and counter-accusation between the Peoples Democratic Party (PDP) and Action Congress of Nigeria (ACN). Cleric and politician, the General Overseer of Latter Rain Assembly, Pastor Tunde Bakare said SURE-P is another drain pipe of the country’s economy embarked upon by President Goodluck Jonathan.

Bakare said: “If people are saying that PDP is sharing the subsidy reinvestment fund, I would not be surprised. If PDP does not share the money, who will? Do you think the PDP has good intentions? I felt pity for Kolade when he was appointed to head that committee. In response, a chieftain of the PDP in Ekiti State and former South-West publicity secretary of the party, Mr. Kayode Babade, said the ACN goofed on the issue at stake.  “It is nonsense for ACN to accuse PDP on a programme it did not have the fact on how it is being operated.’’  

Public Relations Officer of the SURE-P committee, Mr. Adelani Ashamu, said it was unfortunate that the ACN failed to ask its governors what they did with their 54 percent of SURE-P funds accrued to their states every month before poke nosing into that of the Federal Government activities. Ashamu pointed out that the Federal Government used its own share of SUPE-P funds (41 per cent) as an intervention on infrastructural projects like roads across the country and re-vamping of rail system.

According to former Chairman Christopher Kolade, SURE-P also started a Graduate Internship Scheme, and the Maternity and Child’s Healthcare programme. It trained about 4,000 midwives to deliver maternal services to pregnant women and to people in childbirth.

‘‘This is an intervention mechanism. People must remember that the business of government is ongoing. In fact, the area that SURE-P intervenes in does not represent the totality of government activity. For instance, we are not doing anything on housing, we are not doing anything on maritime. Government activity is going on all the time but this SURE-P money is money that was not in the normal budget. So government has decided to use it to supplement what they are doing with the normal budget. So for instance, if you take any road construction in which we have now come to intervene, what we do is to say, according to the budget of the ministry of works, how far have you gone with this road already? Let’s say the totality is 200 kilometres and they tell us they have done 70 kilometres. The question we pose is how much will your budget do in the next 12 months and they tell us they can do another 25 kilometres, we then go from that point, we now apply our own funds to continue. We don’t change contractors because that means you are doing something new, the contractors are ready to do this work, but the pace of funding has been slow, so we say to the contractors that okay, we are now going to12 months give you more money, so although you have said you will do only 95, how far can you go if we are able to give you another N40 billion? And they say in the next 12 months we can do another 50 kilometres. We are concerned with only 50 kilometres. So it’s not a duplication, it is supplementary, that is why it is an intervention,’’ he said.

A Nigerian, name with held, while criticizing SURE-P graduate internship programmes said, ‘‘3000 young people in paid N10, 000 employments for one year! What exactly is that waste of money for? What happens after the one year? What kind of short sighted policy is that? after almost an identical spend during the poverty alleviation scheme. How about set up loans - or guarantee loans for green - field business, so that actual businesses can start and employ this youths for periods far in excess of one year and still pay back to the government?  Money given to companies to employ youths for internship programme - who thought up this scheme? What happens after the government stops paying the money? Was there any form of policy analysis before this was adopted? How about an easier to manage and less prone to corruption, tax breaks for companies that employ Nigerian graduates. It is less prone to my paying my cronies for fiction internships and could be managed through existing tax laws using the universities and the NYSC scheme. 

 Community members travelling around to visit road projects- really? Are these committee members trained Engineers? What would they know about the quality of a road project? What happened to the Engineers trained and employed by the Ministry of Works?’’ he quarried.   In furtherance of the mandate given to the committee, President Goodluck Jonathan early this year appointed Gen. Martin Luther Agwai (rtd) as the substantive chairman of the Subsidy Reinvestment and Empowerment Programme (SURE-P) Gen. Martin Agwai (rtd.) was until then the Deputy Chairman and Acting Chairman of SURE-P.  Dr. Kolade had resigned citing old age.  Agwai is currently the chairman of the Committee and has continued the federal government’s efforts aimed at reinvesting the subsidy removal fund into infrastructure and empowerment projects across the nation.  In the words of Ezekiel Keith, ‘‘one can only hope that the controversies will end so that meaningful progress can be achieved.’’