US Links Nigeria’s Poor Social Services to Inefficient Energy Sector
The United States yesterday linked Nigeria’s poor social service delivery system to its continued practice of state-sponsored subsidy for petroleum products in the country and failure to allow its electricity market operate on market-based principles.
According to the US, the decision of the country to continue to transfer public funds to keep petrol pump price at lower levels, as well as electricity rates below cost-recovery levels, meant that less funds are available to fund education, health care and other social sector services.
The US Agency for International Development (USAID) Country Mission Director, Stephen Haykin, who represented the US Ambassador to Nigeria, Stuart Symington, at a public function in Abuja yesterday, stated that apart from the inefficient energy sector of the country, low tax revenues were also responsible for poor government investments in the social sector.
Haykin, spoke at the 10th Anniversary Colloquium of the Financial Nigeria Magazine in Abuja, alongside a former health minister and currently an adjunct professor of global health at Duke University, Muhammad Pate, who disclosed that about 40 per cent of under-five children in Nigeria were currently experiencing stunted growth.
“One proximate cause of poor health, education and nutrition standards is low public expenditures. This in turn is related to very low public revenues due in fact to low tax rates and weak systems for tax collections.
“Low social spending is also as a result of transfers from government to petroleum and power sectors because fuel and electricity tariffs are below cost recovery levels,” Haykin said in his remarks at the colloquium.
He noted that conflict across the country could also be responsible for Nigeria’s poor social development, adding that, “fiscal, trade and other micro-economic policies tend to act as breaks on private sector initiatives on economic growth. Weak governance due to inadequate capacities or lacks of checks and balances also slows social and economic development.”