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Why Buhari must remove fuel subsidy –Financial expert

David Adenekan
David Adenekan
Subsidy: Real reason FG, labour meeting did not hold -Source
Fuel supply

A financial expert, Chief Adegboyega Adegoke, has urged  President Muhammadu Buhari, not to waste more time to remove subsidy on petroleum products.

He said the policy of subsidizing petroleum products had outlived its usefulness for the poor Nigerians it was meant for.

Adegoke, while speaking with journalists in Ibadan, said removal of subsidy on petroleum was long overdue  because the existing subsidy was a waste which was not in the interest of the masses.

He stated that the masses would continue to get poorer if it was not removed.

He said the existing subsidy policy where government spent billions and trillions of naira annually was not in favour of the masses but the few rich who had many cars in their garages.

Nigerian governors led by its Chairman, Dr. Kayode Fayemi of Ekiti State, had in July this year lamented that the federal government spent about N28.6 billion on subsidy in 2016.

He added that the amount rose to N219 billion in 2017 and N345.5 billion by mid-2018, as the price of oil and domestic PMS consumption rebounded.

But, Adegoke who is the Executive Director, Finance and Chief Financial Officer of OES Energy Services, maintained that the huge amount  the federal government has been spending  on yearly basis on fuel subsidy had no positive impact on the poor because, it was meant to enrich the few rich.

He stated  that the government should be sincere to remove the subsidy on fuel and spend the money realized to develop mass transportation, agriculture, schools and hospitals that would be accessible to the masses.

He insisted that that was the only way the people could  benefit from the removal of the fuel subsidy.

Adegoke added that the growth of Nigeria might be a mirage because, government spent more on recurrent expenditure than capital expenditure.

He said, “That is why I don’t support subsidy. The basic thing that the federal government can do which is to remove subsidy, because it is a waste. Subsidy is a waste. You said you are helping the poor. Which poor are you helping? How many poor are you helping? How many poor own a car? By having five cars, that means the federal government is subsidizing the fuel that I buy into them. The poor that you are talking about enter public buses.  What the federal government can use that money after it removes subsidy is to invest it in mass transportation. And when I say mass transportation, it does not mean buying more buses but building mono rail across all the states in the country.

“Mass transit, don’t buy buses to increase the number of buses on the roads that are already congested, but  build mono rail. So, if they remove subsidy and the government is sincere with it and use it to build mass transit, have a target instead of some people to pocket the money, billions of naira. You build the mono rail and get the private sector to buy the coaches.

“Also, it could be spent on power. If there is an improvement in power, it will reduce unemployment rate. Welders need light, that is why all of them are riding motorcycles. If there is light, I can tell you that if you want to establish laundering and dry cleaning services, you will be thinking of how much to use to buy generators. What KVA generator do I need to buy? Everybody needs power. What business do you want to do that you will not need electricity.

“The only problem that I see is that, any country that is spending more on recurrent expenditure than capital expenditure will not grow. That is the basic fact because capital expenditure is the one that will help you to develop and generate future income and revenue. If roads are bad and you spend ten hours you lose nine hours.  That will affect productivity. Productivity will be low. Our problem in this country is that we spend more on recurrent than capital. There is a lot to be done.”

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