Mr. Tunde Olatunji, an expert in Development Economy and Finance, has urged the Federal Government not to remove fuel subsidy as suggested by the International Monetary Fund (IMF).
Olatunji, who is a member of the Osun State House of Assembly, told the News Agency Agency of Nigeria (NAN) in Osogbo on Tuesday that the removal of fuel subsidy would do more harm to the economy than good.
NAN recalls that the IMF said in April that with the low revenue mobilisation that existed in Nigeria in terms of tax to Gross Domestic Product, it would be good for the country to remove fuel subsidy.
Addressing a news conference at a joint annual spring meetings with the World Bank in Washington DC last month, the Managing Director of IMF, Christine Lagarde, said that by so doing, the country would be able to move funds into improving health, education, and infrastructure.
But Olatunji said that before the Federal Government could remove the subsidy, it should ensure that it strengthened the country’s refining capacity.
“Nigeria should not talk about removing fuel subsidy now until we have another arrangement in place.
“Removing subsidy is not rocket science, but we must develop our local capacity for refining our products.
“Even if we are not exporting locally refined products, we can meet our domestic consumption needs and thereafter we can begin to plan on removing the subsidy.
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“Any attempt to remove the fuel subsidy without any other arrangement in place, will be like ‘solving one problem by creating another’.
“If we take away fuel subsidy, the pump price will go up, which will have a ripple effect on all goods and services and at the end of the day people will begin to pay more,” he said.
Olatunji added that the advice offered by IMF might be because of corruption which has affected the economy through the subsidy before the advent of the President Muhammadu Buhari administration.
“Most countries in the world decide which commodity to subsidise.
“As a matter of fact, America as at today subsidises its agriculture products and I don’t think they are planning to take it away now.
“Subsidy is not a crime. As a matter of fact, it is an economic tool.
“It is when the subsidy regime gets abused and monies meant for it go into private pockets that it becomes an issue,” Olatunji said. (NAN)