Ben Akabueze, director-general of the Budget Office, has said that the trillions of dollars spent on fuel subsidies in Nigeria could be used to increase the pay of public servants, thereby meeting the demands of the Academic Staff Union of Universities (ASUU) members for higher wages.
During an interview with Arise TV on the global business report programme, Akabueze said that public servants should be paid more than that, citing the ongoing issue of lecturers’ wages and the ASUU strike, but he noted that inadequate public sector revenues limit the government’s ability to pay more.
“I haven’t met a single government official involved in this process who believes that lecturers are adequately compensated or that lecturers should not be compensated more,” the director general said.
“At the end of the day, the crux of the matter now is simply the ability to pay, and that’s why this matter has dragged on; because the government has refused to commit to a number that it does not have the ability to pay.
“When we take these subsidies and redirect them to more productive uses, we also unlock investment potentials in that sector,” Akabueze said.
According to him, “We should no longer be a country that just exports crude oil 60 years later; we should be a country that only exports refined products, not crude, but you won’t see those investments if you keep these subsidies that distort market structure and create unpredictability for investors.”
Furthermore, the Director-General addressed a number of pressing economic issues:
In response to the suspension of the Telecommunications Tax, Akabueze said: “I’m not aware of any suspension because this (tax) is now law. We haven’t been informed about the suspension beyond what I’ve read in the media.”
As to whether Nigeria has revenue or debt problem, he stated, “When you look at all the other indices of debt sustainability, our debt looks fine. This is true until you consider debt-service-to-revenue. That is where Nigeria looks particularly bad, and where we are pushing the boundaries of sustainability.”
On whether Nigeria could be forced to seek IMF assistance, the DG said: “I don’t see Nigeria going to the IMF voluntarily.” In Nigeria, this is a contentious issue. However, if we do not address our fiscal challenges in a prudent and long-term manner, we may be forced to approach the IMF.”
In addition, the Director General also discussed the Central Bank of Nigeria’s Ways and Means Financing of the Federal Government, which has increased to N19.9 Trillion as of June 2022, as well as the Asset Management Corporation of Nigeria’s (AMCON) toxic asset pile of N5 trillion. He noted that both are critical debt issues that the government must prioritise.