How FG got subsidy removal wrong —NECA

How FG got subsidy removal wrong —NECA

 A prominent member of Organised Private Sector, OPS, the
Nigeria Employers’ Consultative Association, NECA, has said the federal
government got it wrong the manner it removed subsidy on  premium motor spirit, commonly known as
petrol, in June.

 

In an  interview with
Vanguard, the Director-General of NECA, Adewale-Smatt Oyerinde, said with the
benefit of hindsight, one of the things that should have been done  before the subsidy removal was to fix at
least one of the nation’s four refineries to create a buffer or bridge for fuel
prices.

 

Speaking on whether the expectations of fuel subsidy removal
had been met, he said: “When you find yourself in a hole, the first thing you
will do is to stop digging. When you stop digging, it does not mean you are out
of the hole because you are already on ground minus zero.

 

”The first thing you will have to do is get yourself out of
the minus ground zero to zero level before you can start thinking about
development or its gains.

 

”What has happened now is that subsidy has been removed and
when subsidy is removed, one of the things we should have done, with the
benefit of hindsight, is to fix at least one of those refineries to create the
buffer or a bridge for fuel prices.

 

”Because we did not do that, the issue of importation at the
global market prices, came up and we have to pay at that price. The flip side
is that before the last administration left around January and February, it was
reported that we were using about 98 per cent of our revenue to service debt.

 

“It showed that there was no revenue in place. The past
administration made provision for fuel subsidy up till June. If the past
administration was actually borrowing to fund subsidy, the natural sequence for
a business man is to ask himself if he is really saving because you cannot be
saving money you don’t have.

 

”If I am borrowing to fund and I decide not to fund it
again, what I have stopped doing is to stop funding it and to stop borrowing.
So, you cannot technically say that I am saving because what I have stopped
doing is borrowing to support subsidy.

 

”What we  need to do
now basically and we are not expecting a miracle, we are not expecting that
fuel subsidy is removed and probably the small group that are benefiting from
it to say the business is over because there will always be some level of fight
back. However, it boils down to government doing the needful.”

 

”Government remains government, irrespective of how strong
the cabal is and it should take responsibility for the consequences of the
removal. We believe much more can be done, we believe a lot of stakeholders’
engagements can still be done and we also believe that more transparency can be
put into all these issues of fuel subsidy.

 

”That will assuage stakeholders and help government build
consensus around its plan, especially as it relates to removal of fuel
subsidy.”

Source: How FG got subsidy removal wrong —NECA

 - NigerianEye
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