“Disrupt - Create - Lead”.
About AACS!
AACS Fortnightly
(Mondays)
24th October 2022
From the Chairman’s Desk,
The UK Learns, The Nigerian Nation Can Too
The general downturn in the global economy has reinforced the fact that leaders who pay more attention to details and take pragmatic decisions on behalf of their countries, trump those who rehash what the citizenry may want to hear, or needing to be politically correct. The AACS Fortnightly of 10th of October (https://lnkd.in/ea_gitgC) analysed the errors of the British govt in its September “mini budget” policies (growth and supply side economics) that are perhaps good for a different season, but clearly very poor for this. Huge unfunded tax cuts in an economy running at a deficit clearly is ill advised, and since that commentary by AACS two weeks ago, the British Chancellor and Prime Minister have lost their jobs. We have also seen the new Chancellor all but reverse the policies.
This reality tells a lot to the Nigerian polity, and critical decisions that need to be taken, chief of which at the moment could be the petroleum products subsidy by the govt which has costs the nation ₦2.6trn as at September 2022, and may cost ₦3.5trn by the end of December. This is clearly unsustainable and ill-advised in the face of huge competing needs. The entire ‘windfall’ that should have come from the high oil prices occasioned by the Eastern European conflict, is partly wiped away by the corresponding expensive refined petroleum products importation which is heavily subsidised. Projections for fuel subsidy in 2023 are estimated at ₦6.72trn, an almost 70% increase from the previous year, and surpassing funds for education, health, security and infrastructure.
The subsidy needs to go, while we diligently divert a part of it to other aspects of the economy, especially public transportation to cushion the effect of the market price of petroleum products, so we do not have a cost push inflation on other related sectors that depend on transportation. A healthy investment in public transportation will ensure that the masses do not suffer the pains of subsidy removal; moderate the consumption by other users, and totally eliminate smuggling of the products to the west coast where prices are market. The nation can hardly afford a ₦6.7trn expenditure on fuel subsidy when education, infrastructure, health and security need urgent attention to enable improvement in production.
There are several other wasteful policies that need to be re-examined to cut waste, and free resources for dire needs. Leaders must continue to be pragmatic and resourceful in public policies, and tackle issues from a realistic and sustainable view point.
Falil Ayo Abina