The incoming administration has been advised to take a critical analysis of the negative and positive impacts of fuel subsidy removal before taking a final decision on the matter.
Taking such an approach would enable it to have holistic implications of its acts on the subject matter and it would enable it to chart a new course
Yemi Kale, Former Statistician General of the National Bureau of Statistics and now KPMG’s Chief Economist gave this advice on Monday while speaking on Arise Television
Some in-country analysts have said that the IMF, World Bank, and others are saying Nigeria should remove fuel subsidy but have not told the government how to address the social impacts that would come along with such an exercise.
They advice Nigerian to be wary of the number of school children that may not be able to go to school because of high transportation fares, and its effect on food prices, even on health if the subsidy is eventually removed
Yemi Kale while advising those that would implement the policy, he urged them to approach the matter from a technical and unemotional point of view, so as to be able to determine what is best for the country.
“This is the way the conversations on the fuel subsidy removal should be.”
He stated that undeniably, removing fuel would have significant economic and social costs and even environmental cost.
“When you have a subsidy regime that in six months in 2023 is higher than your budget for health, education and infrastructure combined, then, you have to ask yourself if that is the best way to run the economy.
“The truth of the entire thing is that the big men benefit more from the subsidy than the poor men we are saying would be affected negatively by the removal.
The rich people consume more petrol from moving from point A to B with their cars, which is a lot higher than the lower class moving from point A to B, in a commercial vehicle with five other passengers or a bus with more than 20 passengers.
“Consumption per capita in such a case is often less compared with that of the rich. That is not to say that the impact is not going to be more on him.
According to Kale, the government should identify ways to compensate individuals who might be on the losing end if subsidies are eliminated in order to restore balance for the benefit of the country.
