As the price of crude oil in the international market continues on the upward trend, the Federal Government has been charged to utilise its surplus gains to cover budget deficit or build infrastructure.
Biodun Adedipe, chief consultant of B. Adedipe Associates Limited who made this assertion, noted that the government should also be responsible for its insurance needs.
Speaking at a media parley sponsored by Boff Insurance Brokers Limited and B. Adedipe Associates Limited, in Lagos, Adedipe stated that the price of crude has been favourable to the economy.
Adedipe said: “The price of crude has been favourable to us. It is either you use the gain to reduce the deficit, or alternatively, you use that gain to build infrastructure, which ultimately will also increase government revenue.”
Adedipe also warned that the forthcoming election could create liquidity pressures in the economy as there will be too much money in circulation.
He said: “In pre-election years, politicians spend a lot of money and that creates liquidity pressure. You have so much money circulating and that stands to put pressure on prices, so it is expected this year that there will be inflationary pressure.”
Adedipe also decried the high volume of imports against exports in the country.
To him, “In recent years, import value in Nigeria had become far greater than exports. Yes, we export crude oil, we export condensates, as well as associated gas. Inspite of that, we have been importing more than exporting and that has been creating employment for other countries to the detriment of our country.”
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Adedipe noted that, there is nothing wrong with borrowing, adding that, “but don’t borrow to buy food, don’t borrow for consumption, if you must borrow, borrow for anything that is investment in nature. We produce crude oil but don’t refine”
While speaking on the insurance sector, Adedipe said: “For the insurance sector to grow, the government also needs to be responsible for its insurance obligations which talks about paying premiums. There also must be a need for flexibility and also ensuring that compulsory insurance is enforced because enforcement has always been an issue.
“If the government is responsible and puts a lot of effort into enforcement, then what we have today as compulsory insurance we can actually create more value from. And when the insurance sector is vibrant, it will galvanize businesses and individuals to take risk and that is how economies grow.
“The freedom to take risks is on the back of a vibrant insurance sector, so the conversation should be how we can make that sector vibrant.
“That brings us to the creating platform for interactions between government agencies and the insurance sector, so that all stakeholders constantly are engaging and so whatever is needed to be done to make us deepen insurance, the government will keep making that happen.”
