‘Remove subsidy, adjust electricity tariff to expand economy’

Following the conclusion of the Presidential election, FSDH Research believes there are pressure points in the Nigerian economy that the Federal Government must quickly address in order to stimulate broad based and strong inclusive growth.

At its monthly media briefing at the weekend, the Head of FSDH Research, Ayodele Akinwumi, notes that the Nigerian economy is not expanding enough to lift citizens out of poverty. Therefore it needs to expand faster than it is at the moment.

Akinwumi said: “The Federal Government should consider adjustment of the electricity tariff to reflect current costs in the economy and to enable the sector attract investments and guarantee efficient metering system.”

He also said the removal of “subsidy” on Premium Motor Spirit (PMS) would free up more resources to critical sectors of the Nigerian economy and drive competition among the operators and attract investment in the sector

Recall that Minister of State for Petroleum Resources, Ibe Kachikwu, had disclosed that the Federal Government’s annual expenditure on fuel subsidy (described as “under-recovery”) has risen to over N1.4 trillion, which means about N3.76 billion is spent daily on subsidising petrol.

Akinwunmi identified ‘Some Current Economic Pressure Points’ to include: Weak Disposable Income in the country, High Unemployment Rate in the country, Weak infrastructure development in the economy that may not support the growth ambition of the Federal Government, Economic depression in the real estate sector of the Nigerian economy and Fragile Foreign Exchange Market and Weak Revenue Generation for the Federal Government leading to large fiscal deficits.

He said policy options the government include: “Removal of all administrative delays in obtaining licences and approvals. This includes titles to landed properties for building and agricultural purposes.

Others are “Urgent restructuring, deliberate and consistent investments in the nation’s educational system to enable it provide relevant trainings that are needed in the modern digital age.” the for