If Nigeria ends fuel subsidies in the middle of 2023, fuel prices at the pump will spike. Whose responsibility is it to mentally prepare the residents of Africa’s most populous nation for this change in price?
The results of two online polls carried out on Arise TV want the government to shoulder this responsibility. According to the poll conducted on Twitter and YouTube platforms of the broadcast network, a lot of Nigerians expect the government to take the lead regarding preparing the nation for fuel pump prices after subsidies are removed. 44 per cent of respondents picked the government while 43 per cent said the responsibility should be equally shared between government, economic think tanks, the media, and labour Unions.
Responding to the poll while speaking to Arise News on the station’s Global Business Report, Dr Andrew Nevin, Partner and Chief Economist at PwC Nigeria said; “There needs to be some communication to Nigerians on planning for what is going to be a major change” Chinwe Egwim, Chief Economist at Coronation Merchant bank, also responded to the poll saying “A collective effort is required from the perspective of Government in terms of a policy reform and the media as one of the most powerful tools that can communicate change and articulate the right message to support necessary adjustments to a post-fuel subsidy Nigeria.”
Professor Joseph Nnanna, Chief Economist at the Development bank of Nigeria, said “Economic Think Tanks have a role in explaining the economic implications for Nigerians especially for those at the bottom of the pyramid.” For Tilewa Adebajo, Chief Executive Officer of the CFG Advisory, the responsibility lies squarely with the Government: “If Government is not taking the lead in this, then it is not going to work. We do not have enough revenues to service our debts. Our revenues are down because we are paying subsidies and NNPC has remitted little to nothing to the Federation account. The Govt is in violation of the fiscal responsibility act. If there is no political will from the Government then we will still be talking about fuel subsidies next year” Dwindling national fortunes have taken a huge toll on the economy with the government suggesting harsher fiscal times are to come in 2023 if fuel subsidies are retained.
It will be recalled that the Minister of Finance and National Planning, Zainab Ahmed said the government’s budget deficit is expected to exceed N12.42 trillion if petroleum subsidies are maintained for the entire 2023 fiscal cycle.
Ahmed stated this when she appeared before the House of Representatives Committee on Finance to defend the 2023-2025 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP). She also said the federal government plans to borrow over N11 trillion and sell national assets to finance the budget deficit in 2023.
It is believed that the opportunity cost of trillions expended on fuel subsidies is capital expenditure on vital infrastructure like Hospitals, Schools, Broadband internet, and other pressing needs