Oil Subsidy to end next year, Buhari
"At the current N500 billion monthly, Nigeria could pay out as much as N6 trillion in oil subsidies in 2022," IMF Chief Aisen.
President Muhammadu Buhari has announced the discontinuation of the oil subsidy regime from next year. He stated this while presenting the 2023 budget estimates to the joint session of the National Assembly in Abuja.
He described the oil subsidy regime as grossly unsustainable in the current reality of low revenues occasioned by oil theft and insecurity. Oil subsidy has balloned over the years with government spending trillions of naira to maintain the subsidy regime.
At the current N500 billion monthly, Nigeria could pay out as much as N6 trillion in oil subsidies in 2022 if oil prices continue to rise and urgent actions are not taken to reverse the trend, the International Monetary Fund had warned.
Ari Aisen, Resident Representative for Nigeria, raised the concerns while presenting the latest Sub-Saharan Africa Regional Economic Outlook in Abuja
The figure is almost one third of the N17.319 trillion, 2022 federal government budget; nearly N6.9 trillion planned recurrent spending; and well above the N5.96 trillion for capital expenditure.
President Buhari, however, said safety net would be provided for the vulnerable members of the society to cushion the effects of the policy. The President also stressed the need for the government to find new ways of generating revenues, he said additional measures of reducing cost of government would be implemented.
He also listed other alternative means of revenue generation, which he said would be explored.
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Source: ThisDay
Safety net! Yes removal of the so called subsidy is very good for the corruption ridden economy but government must be careful of the safety net, otherwise the net itself becomes another corruption nets as other ones before it had become. Even Obi the presidential candidate who promised to remove subsidy must tell us how he will curtail the social problems that will attend it.