The Nigeria Employers’ Consultative Association (NECA) has once more expressed concern over what it described as the country’s unsustainable fuel subsidy regime and the burdensome debt profile of the country.
Speaking in Lagos, the Director-General of NECA, Mr. Timothy Olawale, said that the fuel subsidy regime had proved to be unsustainable and a major leakage in national revenue mobilisation.
Olawale, noted that a former Central Bank of Nigeria(CBN) Governor and Emir of Kano, 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, adding that the government was yet to learn from his advice.
“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, ” said NECA Director General.
These, he said, remained a major concern for organised businesses.
Giving insight into the need for urgent deregulation of the downstream oil sector, Olawale said, “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.”
He noted that, “the fuel subsidy regime has succeeded in creating phony and emergency billionaire at the expense of millions of pauperised Nigerians.”
In the same vein, Olawale expressed concern over the growing debt stock of the country, with huge percentage of the budget, over the last decade going to debt service.
He insisted that, “borrowing could have been permissive, given the state of the economy in 2015 but not to the clearly humongous level it has turned out to be. Incurring debt for developmental purposes is not in question, but the over N24.39 trillion debt stocks, taking over 20 per cent of annual national budget to service should be enough source of worry.
“Though the argument of debt to GDP ratio is tenable, the IMF warned that Nigeria’s Debt-to-GDP Ratio, though good, is risky and cannot be guaranteed going forward.”
He counselled that, “government should do well to manage the rising debt profile, both at the states and federal levels as this trend portends a gloomy future for the nation.”
The NECA helmsman advised that, “government should take steps to put an end to the subsidy regime as the billions spent on subsidy could be used to support the real sector, subsidise critical and productive economic sector and also help government to lift the proposed 100 million poor Nigerians out of poverty.
“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 in the last decade. 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.”