Tuesday, 22 June 2021 18:49

Subsidy removal is a political decision – Dr Ayo Teriba

The CEO Economic Associates of Nigeria, Dr Ayo Teriba argues that subsidy removal is a political decision.

Dr Teriba said this in an interview on CityTalks with Reuben Abati on City105.1.

He is of the notion that as long as the world last, government will keep subsidy on.

He stated that the entire world is involved in subsidy to bring their country out of the pandemic and out of the crisis of the lockdown so that their economy can rise.

Dr Teriba also said that economics has no business with what government decides to use their resources they have for their people.

However, the International Monetary Fund and world Bank are not just the ones talking about subsidy removal, which was mentioned during the virtual meeting with officials of IMF and Nigerian officials in collaboration with World Bank on the Nigerian Economic update.

The minister of state for petroleum resources, Timipre Sylva has being quoted saying that the Nigerian government will not remove petroleum subsidy in June but Nigerians should realize that the subsidy that is provided under cost the under-recovery plans of the NNPC is over N100 Billion per month and that if we are to have appropriate pricing, Nigerians will be paying close to N385 per liter.

The Nigerian National Petroleum Corporation has also said that the situation is not really in the best interest of Nigerians.

The Group Managing Director of Malaye Kyari said that oil prices are going up $70, $75, and it could reach up to $100 per liter before the end of the year and that is not in Nigeria’s best interest.  

When Dr Teriba was fielded with questions on his view of the virtual meeting with the IMF officials, Nigerian officials in collaboration with world bank, he described the outcome of the meeting as “superficial policy postulations.”

He stated that government revenue has being blighted by the pandemic and the lockdown, as well as companies and individuals.

He however raised the question, “which companies will pay the tax the tax?

“What blighted the government revenue, also blighted corporate profits and also personal income.

“So where is the increased tax going to come from?

“Is it in economy that is in a recession?

“An economy that has suffered two years of recession in 4 years and has not being out of recession in per capita terms in 5 years?”

Dr Teriba made reference to a research IMF has being working on for 3 years on the “wealth of nation,” that he stated categorically that, “it is not only about what the government owes, it is about what the government owns. That many governments don’t know what they own, but the whole world knows what they owe.”

He added, Nigeria is a typical example of that quote.

He said, “all we get to hear is the deficits, how debts are building up?

“And we never get to hear about what the government owns”

 

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