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Fix refineries before removing subsidy

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By Akintola Timothy

Government agencies stifling the capacity of private firms to create employment.

Earlier reports indicated the federal government’s plan to stop paying subsidy by June. This was confirmed by the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, who revealed that the provision of N3.6 trillion had been budgeted to cover the subsidy payment of the first six months of the year. On this, the Director-General of Nigeria’s Employers Consultative Association, Wale Smart Oyerinde has urged the President-Elect to rather ensure the repair of refineries across the country before deciding to totally remove subsidies, so as to avoid further impoverishing the citizens.

Worried about the increasing unemployment rate in Nigeria which was now at a 33.3 percent high, the DG noted that in the global space, approximately 9 out of every 10 jobs were created by the private sector but with the capacity of the private sector being compromised by mostly governmental factors was worrisome. He indicated that the country’s GDP growth was proportionate to the level of organized businesses in the country. He lamented about the governmental agencies and how they stifle the capacity of private businesses to create employment. Even while the Ministry of Labour was complaining about the increased state of unemployment, other government agencies were wrecking private businesses. These contradictions, he said, is a major concern.

Fiscal & monetary policies contradictions creating problems for businesses.

Wale Smart, indicated that these contradictions were stemmed across many differing areas. One of these is the mode of regulation in the country. He explained that overtime, regulators were known to cross their regulatory thresholds for income generation which changes the dynamics of businesses. This case of contradictions within government was described rather as a source of worry. He criticized these agencies for setting bottlenecks when they should be enacting business-friendly regulations. The unaligned fiscal and monetary policies was also described as a major contradiction. The DG explained that as long as the fiscal situation continues to neutralize the monetary policy, problems will continue to be created for businesses. As such, investors will be looking to environments where their businesses can thrive.

With the World Bank ranking Nigeria as the 131st of 190 countries in ease of doing businesses globally, Wale Smart noted that businesses in the country needed input in the context of raw materials. He also noted that businesses should be granted access to forex. On the problems of forex, the DG explained that it was self-inflicted as a result of the oil theft perpetration. He explained that making the environment immensely friendly to help businesses thrive, provision of security and an improvement in the cost of living would all help businesses grow. On the issue of standardization, he stated that this was a problem across Africa, as most African countries continue to not add value to their exports like refining crude oil. The more forex was being sought after, the more damage it does to the Nigeria’s currency.

No inclusive growth in GDP despite contributions of ICT & Agric sector.

Despite Nigeria’s GDP growing by 3.52 percent, important economic indications such as unemployment, inflation and per capita income have remained on the negative curve and the DG asserted that this raised concerns about the veracity of growth. He stated that although sectors like ICT and agriculture had done immensely well in enhancing the economy, there was no inclusive growth. On taking advantage of the Free Trade Area Agreement, he noted that Nigeria must salvage the problems with its regulatory environment and enhance ease of doing business in the country. He also advised the incoming administration to first stabilize the macro-economy and solve the subsidy challenge. He said the refineries in the country must be fixed and subsidy subsequently removed.

The NECA’s DG explained that it was rather risky to further drag over 100 million Nigerians into multi-dimensional poverty due to the policy of halting subsidy before fixing the refineries. With inflation increasing and salary not rising, he explained that the purchasing power of most Nigerians was crumbling already. He also urged the incoming government to look into the rail sector and make it more productive. He further urged that the regulatory and legislative environment must be transformed to reflect a supportive environment. He criticized the naira redesign policy, noting that it was more of a political move without care for the economic implications.

Current administration urged to repair the refineries and stop borrowing.

On the outgoing administration, Wale Smart stated that despite all their efforts, they have failed to curb the inherent contradictions. He noted that it shouldn’t take eight years for any administration to solve the issue of oil theft and fuel subsidy. He criticized the administration for not fixing the refineries within the last 8 years and urged them to salvage the situation of the refineries before leaving office. He also encouraged the administration to deal with the fiscal and ministry policies situation. Importantly, he noted that the borrowing of this administration should stop, so it does not affect the impending administration.


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AN-Toni
Editor
11 months ago

Fix refineries before removing subsidyGovernment agencies stifling the capacity of private firms to create employment. – Express your point of view.

Last edited 11 months ago by Kenny Adetunji
Abusi
Abusi
Member
11 months ago

I don’t agree with this view. They should remove the subsidy as soon as possible. They should also develop the refineries and make them working again.

Taiwoo
Taiwoo
Member
11 months ago

Previous reports suggested that the intention for the federal government to discontinue paying the subsidies would take effect soon.

Kazeem1
Kazeem1
Member
11 months ago

We should try to avoid further impoverishing the people of the country, he should make it a priority to first see to it that refineries all across the country are fixed up before determining whether or not to completely eliminate subsidies.

Ultra0711
Ultra0711
Member
11 months ago

Before anything the government should make sure the minor refineries in the country are up for operation including the just build Dangote refinery so as to make sure we can operate refining within the country.

Haykaylyon26
Member
11 months ago

Fix of refineries is very important all refineries across the country need to be fixed and make sure it all working well and remove subsidy also

Chibuzor
Chibuzor
Member
11 months ago

The expansion of the country’s gross domestic product was directly correlated to the number of firms that were formally organized within the country.

Kazeem1
Kazeem1
Member
11 months ago

.

Last edited 11 months ago by Kazeem1
Tonerol10
Tonerol10
Member
11 months ago

Government agencies stifling the capacity of private firms to create employment. This government is not getting it right they do things the way they like instead of doing the right thhing

Adesanyaj72
Adesanyaj72
Member
11 months ago

the agencies run by the government and the ways in which they inhibit the ability of private firms to generate new jobs.

Godsewill Ifeanyi
Godsewill Ifeanyi
Member
11 months ago

The DG noted that issues will continue to arise for companies so long as the current state of the government’s finances maintains its ability to balance off the central bank’s monetary policy.

Godsewill Ifeanyi
Godsewill Ifeanyi
Member
11 months ago

.

Last edited 11 months ago by Godsewill Ifeanyi
Nwachukwu Kingsley
Nwachukwu Kingsley
Member
11 months ago

This was a problem throughout the entirety of Africa due to the fact that the majority of African countries continue to not add value to their exports, such as refining crude oil

Hassan Isa
Hassan Isa
Member
11 months ago

Businesses will continue to face challenges for as long as the current state of the economy maintains its status quo in terms of its influence on monetary policy.

SarahDiv
Member
11 months ago

I don’t know why the federal government keep on borrowing money when we can fix our refineries and generate a better revenue that can be use to run the country. The president elect should work on repair the refineries for maximum capacity before subsidy removal.

Tolaniiii
Tolaniiii
Member
11 months ago

If we’re serious about keeping the population from sinking any farther into poverty, the president should prioritize fixing up the country’s many refineries before deciding whether or not to do away with subsidies altogether.

Bola12
Bola12
Member
11 months ago

government organizations and the restrictions they place on private businesses’ capacity to create new employment opportunities.

Christiana
Christiana
Member
11 months ago

The growth of the country’s GDP was proportional to the increase in the number of legally established businesses there.

Iyanu12345ogg
Iyanu12345ogg
Member
11 months ago

I’m in support of the proposed discussion.
If there are possibilities to remove subsidies and as well fix refineries, make it happen as soon as possible. It would be nice Nigeria and her people will be beneficiaries.

Last edited 11 months ago by Iyanu12345ogg
DimOla
DimOla
Member
11 months ago

Subsidy shouldn’t be remove until the refineries are fixed. Since the inception of this 4th republic several promises and the proported investment in the Energy/power sector including fixing the refineries were made but no tangible result only for the government of the day to be thinking about Dangote refinery. I pray that the next president should able to fix all this anomaly and restall the country to prosperous state.

Remi1
Remi1
Member
11 months ago

Fixing the refineries before removing subsidy is essential. And it’s the least this administration can do before passing on to the next administration. Also fixing the refineries would provide employment opportunities.

theApr
theApr
Member
11 months ago

To increase the country’s GDP, the refineries must be fully operational. The increase in the number of legitimately operating businesses in the nation was correlated with an increase in GDP.