The Manufacturers Association of Nigeria (MAN) has called for a dialogue between the federal government and other relevant stakeholders on how to resolve the lingering problem of petroleum subsidy.
MAN stressed that if no efforts were made to carry Nigerians along on such a national issue, any other moves by the government would end up as a recipe for national disaster in the near future.
The Minister of Finance, Mrs. Zainab Ahmed, recently said the federal government had no intention to remove fuel subsidy. She explained that subsidy would only be removed when the federal government finds a formula that would cushion the effect on Nigerians.
But the Director-General of MAN, Mr. Segun Ajayi-Kadir, who spoke to Akelicious in an interview, said, “now the consideration of fuel subsidy, even though an economic issue and requires deep circumspection and far sightedness, has been infested with social and political considerations. “Whether you retain or remove the subsidy, there are economic, social and political consequences.
“So government needs to engage in frank and strategic conversation with the relevant stakeholders in the value chain and be ready to inform the people and carry them along on the choices we have before us as a nation.
“We must be interested in the future, the young and future generation. No nation can afford to live for the now, because the future is actually rushing at us.”
He added: “There has to be a plan, with timelines and milestones that must not be missed on the road to removal of fuel subsidy because it is simply unsustainable in the medium to long term.”
Continuing, Ajayi-Kadir said, “the government has to lead the people in a conversation as to what is priority and deserving of subsidy, when and for how long.
“The right solution you alluded to has to be one that supports and incentivises the inflow of investment into the sector and allows Nigeria to reap the enormous potentials in the value chain.”
The Director-General of the Nigerian Employers Consultative Association (NECA), Mr. Timothy Olawale, who also spoke to Akelicious, said “it will continue to be a recurring problem of wastage and systemic opportunistic stealing as long as at lasts.”
The Lagos Chamber of Commerce and Industry (LCCI), had penultimate week described fuel subsidy which the World Bank said cost Nigeria N731 billion as the biggest fiscal burden that currently hamstring the growth of the Nigerian economy.
Director-General, LCCI, Mr. Muda Yusuf, had said: “Perhaps the biggest fiscal burden on the economy today is the petroleum subsidy regime. It is a big hole in the finances of government. “It puts tremendous pressure on the foreign reserves and the foreign exchange market, just as it exerts immense stress on the nation’s treasury.
“It remains a cause for concern that the subsidy regime had subsisted, especially at a time when the economy is facing unprecedented fiscal challenges; at a time when productivity in the economy is constrained by acute infrastructure deficit; at a time when public institutions are finding it hard to fund their basic obligations.
“There cannot be a better example of resource misapplication.”
A recent World Bank report, which focussed on key developments in Nigeria’s economy in 2018, had stated that the Excess Crude Account (ECA) was virtually depleted during the period.
Similarly, in November 2018, the World Bank had stated in another report entitled: ‘Nigeria Bi-annual Economic Update for Fall 2018,’ that petrol subsidy deductions for 2017 full year was N107.3 billion, but its current report showed that N731 billion was spent in 2018 alone.
It also stated that most of the petrol volumes Nigeria spent money to subsidise in 2018 were inflated as daily consumption rose to 54 million litres per day (ml/d) from 40ml/d in 2017, ostensibly due partly to out-smuggling.