Fuel subsidy removal is a necessity for survival of Nigerian economy: Expert

*Dr. Muda Yusuf, former Director-General of Lagos State Chamber of Commerce and Industry says the current administration in the country should channel the money being spent on subsidy into funding primary healthcare, basic education and rural roads

Alexander Davis | ConsumerConnect

In spite of the current groundswell of opposition, especially from the Organised Labour to the Federal Government’s plan to remove petrol subsidy by June 2022, Dr. Muda Yusuf, immediate past Director-General of the Lagos State Chamber of Commerce and Industry (LCCI), has supported the government’s proposal on the removal of fuel subsidy.

Dr. Yusuf said the authorities’ move to stop the subsidy is necessary for the country’s economy to stand.

Recall the Mrs. Zainab Ahmed, Honourable Minister for Finance, Budget and National Planning, recently announced that the government would remove fuel subsidy and replace it with a monthly N5,000 transport stipend to about 40 million ‘poor Nigerians’.

Lending credence to the government’s plan, the former LCCI Chief, while featuring in an interview on a Channels TV programme monitored in Lagos, disapproved a situation in which the Federal Government spends N3trillion annually on fuel subsidy.

Yusuf said: “For this economy to continue to stand, this is something that has to happen. Look at the macro-economic effects, look at the effect on our reserves, look at the effect on our foreign exchange and more importantly, look at the effect on investments.

“How can we have a sector as important as the petroleum sector and we have a policy that is practically blocking investments into that sector because that is what this thing is doing.

He remarked: “We cannot continue with a situation whereby we will be spending close to N3 trillion annually on subsidies and not just because of that, because of the investment, macro-economic implication.

“We are almost feeding the entire West African sub-region with our PMS. That is not sustainable unless we want to cripple the entire economy.”

According to him, the current administration in the country should channel the money being spent on subsidy into funding primary healthcare, basic education and rural roads.

Policy impact on Nigerian consumers?

Though Yusuf admitted that the Federal Government’s new policy on subsidy would not be easy on Nigerians, he said that subsidy removal would have a lot of social implications.

He stated, among others, inflationary implications and political costs for the ruling political party in power at the centre as challenges.

The government has engaged the masses by proposing a minimum of N5,000 per month to about 40 million vulnerable masses, he added.