$800m petrol subsidy palliatives not sustainable – Experts

By Philip Shimnom Clement (Abuja), Abiodun Alade & Abdullateef Aliyu (Lagos)   More stakeholders are calling for the halt in the $800 million petrol subsidy palliative implementation by the federal government saying it is not sustainable. Daily Trust reports that the federal government has secured a World Bank loan of $800m, saying N5000 would be […]

By Philip Shimnom Clement (Abuja), Abiodun Alade & Abdullateef Aliyu (Lagos)

 

More stakeholders are calling for the halt in the $800 million petrol subsidy palliative implementation by the federal government saying it is not sustainable.

Daily Trust reports that the federal government has secured a World Bank loan of $800m, saying N5000 would be paid to 10m households for the next six months.

The Centre for Fiscal Transparency and Integrity Watch (CefTIW) said the loan facility, if passed by the National Assembly, will worsen the country’s fiscal situation.

In a statement on Wednesday by its Head, Public Relations, Mr. Victor Agi, the centre called for the suspension of the loan-funded project, adding that the process is not transparent and Nigeria could not continue borrowing to consume.

He said: “Government’s recent decision to borrow another $800 million as palliative to cushion the effects of fuel subsidy removal will stockpile public debt of N46.25 trillion as at December 2022 according to figures by the Debt Management Office (DMO).

“The figure is projected to be N77trn before the end of the current administration if the Ways and Means Advances from the Central Bank of Nigeria are securitized, and other loans are included.

“Consequently, the centre recommends the suspension of the $800m loan which lacks proper accountability framework, and may not make any meaningful impact on ordinary citizens, but will only further aggravate the public debt stockpile,” CefTIW said.

In a separate view, the Chartered Institute of Taxation of Nigeria (CITN) said the N5,000 payment to 10m households is not sustainable.

President of the institute, Adesina Adedayo, at the 3rd edition of CITN Presidential Briefing and media workshop for journalists in Lagos, also said the federal government must be transparent in telling the public how much is being spent on subsidy and areas the money realised from subsidy removal would be deployed to.

He said the government should focus more on economic development than the payment of N5,000 palliative which he noted is not sustainable.

He however agreed that fuel subsidy cannot continue indefinitely “because it is creating so many loopholes that others are exploiting.”