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The Former Director General of the Lagos Chamber of Commerce and Industry (LCCI), Dr Muda Yusuf stated that Nigeria is between the devil and the deep blue sea.
Dr Yusuf said this on Saturday on CityTalks with Reuben Abati on City 105.1.
However, the fuel subsidy removal is not a new subject to Nigerians. The Jonathan-led administration attempted it in 2012 but resulted to protested from Nigerians that was tagged “October 22” which known as “occupy Nigeria.”
Recall recently, the International Monetary Fund (IMF) and the World Bank recommended to Nigeria that if they don’t deregulate petrol by the first quarter of next year; it may become very difficult to pay salaries.
Dr Yusuf opined that there is an invest angle to conversations that the petroleum downstream sector, and have been staffed of investment.
He added, that they have effectively blocked private capital into that space.
“When you have a policy that is blocking investment into a very critical sector, then it is the economy and the people that will pay for it,” he said.
The economist raised some major arguments which has a social effect on our economy: “One strong argument he raised, is that we need a policy regime that will allow investments to be private capital to go into that sector.
“Second major argument, is what he called the revenue argument. Close to 40% of government revenue is used for payment of subsidy.
“As a country facing challenges in infrastructure, roads and education and we are spending close to 50 % of our revenue on payment of subsidy; that calls to question what kind of priority we have as a country.
“The debt profile is increasing, the fiscal deficit is increasing, debt service component is increasing, and all of this thing is also affecting us one way or the other as citizens.
“The employment effect: the private sector is a source of generating quality jobs for that matter and once they are blocked from investment, how can jobs be created.
“Our foreign reserves: our refineries are not working, consequently putting a lot of pressure on our foreign reserves,” he said.
He raised his observation that only the technocrats, and NNPC have said much about the removal od subsidy but the political actors are not speaking much.
In his view, “People who want to aspire to offices, wouldn’t want the chances to be jeopardized by this very big issue but the impression that have being given that the government is ready to ensure that these things go ahead.”
When fielded with question on the N5000 proposed for 40million Nigerians, he said “it is still a proposal for further engagements but what is important is that government has demonstrated a willingness to at least put something on the table to cushion the effect in the short term.”
He added, “There are concerns about the integrity of the database itself.”
According to him, “there is no difference btw now and 2012 but for now the message has to be stronger and the people should understand that this is the way to go otherwise if we spent all our recourses on fuel subsidy, we all suffer for it.”
Dr Yusuf recommended engagement and communication so that it can be implemented.