Suspension of planned fuel subsidy removal: Expect more borrowings ― LCCI

The Lagos Chamber of Commerce and Industry (LCCI) has said that, with the suspension of the planned phase-off of the fuel subsidy regime by the federal government, Nigerians should expect more borrowings from government to enable it carry out its projects.

Reacting to the federal government’s suspension of the planned withdrawal of the subsidy regime, the Director-General of the Chamber, Dr Chinyere Almona, in a statement issued on Tuesday, argued that, with a monthly payment of about N250 billion to subsidize fuel consumption, an additional N1.5trillion expenditure would have to be provided for in the 2022 federal budget.

She added that with the additional expenditure against the projected revenue, deficit financing would be needed to support the budget expenditure, which might likely result in government borrowing more than projected, to finance the bloated expenditure in the face of revenue mobilization challenge.

Almona, however, advised the federal government to embark on phased removal of the subsidy, and complement it with heavy investments in critical infrastructure, so as to cushion the effects of such removal on Nigerians.

She noted that such phased removal had become imperative; since it was apparent that the federal government is presently in a dilemma between removal of the subsidy and the hardship the action might cause the citizenry.

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The LCCI’s boss expressed the belief that, phased removal of the subsidy regime, complemented with massive investment in critical infrastructure, would go a long way in supporting production, and, by extension, create more jobs in the country.

Almona, however, cautioned the federal government on the need to shun any action capable of truncating the implementation of the PIA 2021, already seen as a big game-changer by stakeholders in the oil and gas sector.

To achieve this, she added, there must be stakeholders’ consultations, aimed at addressing the implications of lapsed provisions of the Act and forging the way ahead towards the full implementation of the Act.

“The Federal Government must consider doing all that is possible not to truncate the implementation of the PIA 2021 which has already brought so much hope for industry watchers as a big game-changer for the oil and gas sector.

“There is a need for stakeholders’ consultations on addressing the implications of lapsed provisions of the Act and forging the way ahead towards the full implementation of the Act,” she added.