With over N9 trillion reportedly spent on subsidy over the last decade, Nigeria, sadly, places premium on funding of corruption-ridden fuel subsidy regime over education and health, which received only N2.1 trillion and N3.9 trillion respectively, Nigeria Employers’ Consultative Association (NECA) has said.
Against this background, NECA has again alerted to the negative economic implication of the continuation of the fuel subsidy regime, insisting it’s not only ill-advised and unsustainable, but also a misplacement of priority by the Nigerian government.
Timothy Olawale, Director-General of NECA, spoke in Lagos, in the wake of the recent warning by Lamido Sanusi, a former governor of the Central Bank of Nigeria (CBN) and Emir of Kano, that the country is at the verge of insolvency due to the trillions naira being spent to fund the subsidy regime.
NECA averred that the fuel subsidy regime constitutes a major leakage in national revenue mobilisation.
Recall that Sanusi recently stated that in 2011, the country made US$16 billion from petroleum sales and spent US$8.2 billion to subsidise imported petroleum products.
“Unfortunately, despite past sound counsel, government has refused to demonstrate the political will needed to deregulate the downstream sector of the oil and gas.
“The non-deregulation of the petroleum sector has fuelled the continued dependence on offshore sources for petroleum products, supply perennial shortage of petroleum products and unimaginable corruptions in the management of the subsidy dispensation. These remain a major concern for organised businesses,” said Olawale.
The NECA DG said there was an urgent need for the government to fully deregulate the downstream oil sector, and free the economy from dire implications of the fuel subsidy regime.
“Over the last decade, the country has spent over N9 trillion on fuel subsidy, about N15.5 trillion on capital expenditure, N2.1 trillion on health and about N3.9 trillion on education.
This is a misplacement of priority and shows that critical developmental items such as education, health and infrastructure have suffered due to the expenditure on fuel subsidy,” Olawale said, adding that subsidy has succeeded in creating phony and emergency billionaire at the expense of millions of pauperised Nigerians.
Olawale also expressed concern over the country’s growing debt stock with huge percentage of the budget now going into debt servicing. He noted that “borrowing could have been permissive, given the state of the economy in 2015 but not to the humongous level it has become.
“Incurring debt for developmental purposes is not in question, but the over N24.39 trillion debt stocks, taking over 20 percent of annual national budget to service should be enough source of worry,” he argued.
The DG urged the government to manage the rising debt profile, both at the states and federal level as this trend portends a gloomy future for the nation
“The increasing debt profile and the corruption-ridden fuel subsidy regime are twin-evil that has clogged the wheel of the nation’s march towards development. Government should do the needful by immediately putting in place a process and enlightenment machinery that will lead to the deregulation of the downstream oil sector and a deliberate disengagement from the debt burden,” said Olawale.
