N4 trillion fuel subsidy injurious to economy, centre warns
• Wants fund spent on productive sectors
Center for the Promotion of Private Enterprise (CPPE) has advised the Federal Government to expend the N4 trillion for fuel subsidy on productive sectors.
Its Chief Executive Officer, Dr. Muda Yusuf, who gave the advice in an interview with the News Agency of Nigeria (NAN) in Lagos, cautioned that the fund, if not properly channelled, could be detrimental to the macroeconomic environment.
NAN reports that the House of Representatives approved the payment of N4 trillion as subsidy for Petroleum Motor Spirit (PMS), popularly known as petrol.
The resolution followed President Muhammadu Buhari’s request for revision of the 2022 Fiscal Framework at plenary presided over by the Deputy Speaker, Ahmed Wase.
The passage got the support of the Senate after the consideration of report of its Committee on Finance, headed by Senator Olamilekan Adeola.
According to Yusuf, allocating N4 trillion for petroleum subsidy payment alone might not be the best because it is being expended on consumables.
“The spending could lead to a spike in the nation’s inflation rate, which is on the rise at the moment.
Then the country’s debt profile will begin to surge because government has to borrow, which is detrimental to the economy,” he said.
The CPPE boss submitted that government’s fiscal revenue position would continue to be challenged, so long it retains subsidy.
“Sustaining the petrol subsidy payment will definitely affect the ability of government to invest adequately in capital expenditure in the country.
“This includes fixing critical infrastructure and enhancing the business climate to enable investment to thrive,” Yusuf added.