Victor EzejaProfessor of Political Economy, Prof. Pat Utomi, has urged the Nigerian government to channel the funds it plans to disburse as palliatives for the discontinuation of the petrol subsidy on schemes that stimulates production.
Following the removal of subsidies on petrol, President Bola Tinubu had directed the National Economic Council (NEC) to come up with intervention measures.
The council had after its meeting in Abuja on Thursday, 15 June, announced that it was considering a sum of N702 billion recommended by the National Salaries Income and Wages Commission as palliatives for Nigerian workers and other vulnerable groups to cushion the effect of the subsidy removal.
The proposed N702 billion cost of living allowance and the petroleum allowance demonstrate the government’s commitment to supporting civil servants during this transitional period.
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Bauchi State Governor, Bala Mohammed, who spoke to State House correspondents after the NEC meeting, said the proposed intervention measures include a monthly petroleum allowance for civil servants, ranging from N23.5 billion to N45 billion.
The meeting which was presided over by Vice President Kashim Shettima, also announced the setting up of a committee to work out, within two weeks, the modalities for organising and distributing the palliatives.
Reacting to the proposal, Utomi, who is also the founder of the Centre for Value in Leadership (CVL), said subsidies are meant for production not consumption.
He stated that based on past experience, the money to be disbursed as palliatives to the citizens may be hoarded by corrupt middlemen.
He further averred that giving out money to the people in the form of cash transfer will not add any value to the economy, adding that what is needed at this time is to create schemes that incentivize production.
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“What I believe is the most effective way to drive growth in our world today, is actually subsidizing human capital in a strategic way.”
He said the government should focus on creating industrial policies that support human capital development in different sectors based on areas the country has factor endowments.
“The government needs to create industrial policies based on factor endowments that could support competitiveness in certain global value chains.”
He said many developed countries including China, adopted that economic development model.
He maintained that the country has an abundance of resources that need to be harnessed to create jobs and generate foreign exchange for the economy.
Victor Ezeja is a passionate journalist with six years of experience writing on economy, politics and energy. He holds a Masters degree in Mass Communication.
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