2021 budget: Prepare for more pain, FG tells Nigerians
•Clarifies unclaimed dividends fund •Experts differ on implications
Nigerians have been told to prepare for more pain this fiscal year, as the Minister of Finance, Budget and National Planning Minister Mrs. Zainab Shamsuna Ahmed, and the Director-General, Budget Office of the Federation, Mr. Ben Akubueze, presented the breakdown for the 2021 N13.588 trillion Federal Government’s Budget.
The top Presidency officers, yesterday, reiterated that subsidies for energy use in Nigeria have been completely removed from the Government’s fiscal plan, meaning that when petroleum prices rise at the international market, Nigerians should be prepared to pay the prevailing rate, even as the country is a top oil producer. They added that same experience goes for the electricity tariff, which was recently increased by 50 per cent from January 1st.
However, there were divergent views among economic experts regarding the Government’s fiscal plans and implications for the ordinary Nigerians.
Speaking in support of the subsidy removal, a Professor of Capital Market at the Nasarawa State University, Keffi, Uche Uwaleke, described it as the best way to go in the best interest of the poor. His words: “Total subsidy removal is in the interest of the common man in view of the fact that subsidy regime benefits the rich more; continuing with subsidy means borrowing more and widening the fiscal deficit. It would also mean diverting what was meant for education, health or infrastructure to subsidy; so the opportunity cost of maintaining subsidy is so high.
The Government can now channel the subsidy funds to those critical sectors.”
However, a former Director-General, the Nigerian Institute of Economics and Social Research (NISER), Prof. Olu Ajakaiye, believes such actions are capable of defeating the government’s plan to fight poverty.
Ajakaiye insisted that subsidy removal will lead to price increases with attendant negative impact on inflation, which is borne heavily by the poor.
Meanwhile, Ahmed also clarified that the N850 billion Unclaimed Dividends and Dormant Banks Accounts was not being borrowed as being widely speculated. She explained that rather, it was a Trust Fund being kept safe for the owners, pending when they show up and are verified by the Registrars.