• Tuesday, May 28, 2024
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Producer subsidies necessary to boost domestic production, says experts

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The federal government has been urged to consider putting in place producer subsidies to boost domestic production in the country.

This was the conclusion drawn from presentations by experts at a recent workshop on “Energy Subsidies: Options and Implications for Development” organised by the Centre for Public Policy Alternatives and the Nigerian Natural Resource Charter (NNRC).

Odein Ajumogobia, former minister of foreign affairs, who spoke at the event, said the current fuel subsidy regime was not sustainable as the nation might get to a point where it would not have enough to pay for the subsidy.

“Subsidy is not bad in itself, but a better option will be to subsidise production and not consumption,” the former minister of state for petroleum resources said, adding that public transportation should also be subsidised.

On his part, Otive Igbuzor, founder, Centre for Leadership, Strategy and Development and member of expert advisory panel of the NNRC, argued that the solution to the corruption in the fuel subsidy scheme was not to eradicate it, but to identify the real problems and solve them.

He said subsidy was meant to contribute to economic growth and reduce poverty, among others.

“We cannot say because we are subsidising corruption, the only way to solve it is to remove it; we have to think about its impact on the poor. Corruption should be dealt with.”

He continued: “Subsidy cannot be eliminated in a society where there is high level of poverty.” He added that government should also consider putting a place producer subsidies to boost domestic production which would reduce the high rate of unemployment in the country and stimulate economic growth.

 

FEMI ASU