Fakoyejo OlalekanThe Federal Government has been urged to remove subsidy in fuel price, as the Nigerian Economic Summit Group (NESG) highlighted some challenges of the Nigerian economy in a new report.
NESG, which is a private sector-led think-tank and policy advocacy group based in Nigeria, said the government should remove the subsidy, eight months after President Muhammadu Buhari-led administration suspended the removal for 18 months.
In a communique revealing the conclusion of the Group’s Board of Directors meeting on Sunday, NESG said, “The proposed Medium Term Expenditure Framework of the federal government clearly indicates that the rising fuel subsidy costs continue to exceed unsustainable levels.
“According to reports from the Federal Ministry of Finance, Budget and National Planning, it is clear that the current fuel subsidy regime’s debilitating impact on our fiscal fragility cannot be overstated.
“We urge the federal government to explore a systematic subsidy removal programme that cushions the impact on our most vulnerable population through a well-coordinated and effectively transmitted social protection regime.” the group said.
NESG further suggested that the Central Banj of Nigeria (CBN) eliminate the multiple exchange rates in Nigeria, as its affecting foreign direct Investment into the country.
“International investors, being savvy and rational, will not invest where there is a real risk to their ability to access and repatriate investment proceeds or when the functional currency is in sporadic depreciation.
“Multiple foreign exchange (FX) markets with significant price differentials create room for speculation, round-tripping, cronyism and outright graft – with an attendant adverse effect on the economy.” the report by the think-tank discloses.
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