October 17, (THEWILL) – Nigerian government should consider full removal of petroleum products subsidy and significant increase in workers’ wages in the 2024 budget.
This view was canvased by the Director, Centre for Economic Policy, University of Lagos, Prof Ndubuisi Nwokoma, while appearing on The Morning Show’ programme of Arise News Television Tuesday.
Responding to a question on high wage bill and debt servicing approved by the Federal Executive Council (FEC) on Monday in the Medium-Term Expenditure Framework (MTEF) which sets the pace for the 2024 budget proposal, Prof Nwokoma said the proposed wage bill of over N3 trillion was on the low side.
He emphasised that inflation has eaten deep into the purchasing power of average Nigerian worker such that the value of their take-home pay has been significantly eroded.
He also urged the Federal Government to fully remove the subsidy on imported petroleum products and let Nigerians pay the full cost of imported the premium motor spirit (PMS) as dictated by the price of crude oil in the international market.
“If I have my way, government should cut down on debt servicing and increase workers’ salaries significantly because incomes are very, very low and we need to stimulate consumer spending,” he said, adding that what the workers are paid today cannot sustain them in the present economic realities.
According to him, government should fully remove any trace of subsidy in imported petroleum products, let the people pay the full cost of bringing the refined products to the petrol stations.
“We must make up our mind on whether we want the government to keep paying the subsidy or not. The Tinubu administration has said that subsidy has gone. In my view subsidy should actually go totally to reflect the real price of crude in the international market,” he said.
He however, warned that the benefits of these measures would not impact on the economy if the government fails to address the lingering challenge of high cost of governance.
He frowned at the huge cost of expensive vehicles for all the National Assembly members while they draw their full emoluments amid worsening poverty among the people.
In another development, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has said the Federal Executive Council (FEC) at its meeting on Monday approved the application for financing from the World Bank’s International Development Association (IDA)
According to the Ness Agency of Nigeria (NAN) Mr Edun disclosed this to State House Correspondents after the meeting in Abuja.
He said the country was able to access $1.5 billion from the IDA, which is the virtually free or zero-interest lending arm or financing arm of the World Bank.
‘’Nigeria has been able to make the kind of macro-economic moves to take the tough decisions to restore balance in the economy in the government’s finances that have warranted support.
“This had engendered support from the multilateral development banks.
‘’It is on this basis that the World Bank is willing to consider and to process on our behalf $1.5 billion of concessional financing, relatively cheap financing and financing that will be dispersed relatively quickly,’’ he said.
Mr Edun said that another $80 million in financing from the African Development Bank was approved by the FEC for the Ekiti Knowledge Zone (EKZ) project aimed at empowering the youth in the sector of Knowledge Economy through technology and communications generally.
He said, ‘’This is basically to support young people and their quest to take on technology to use it to be employed to be trained and to benefit from being part of the knowledge economy.
“This is being part of the technological wave that is present very much in Nigeria, which is becoming a bigger and bigger share of the economy.’’
The Minister of Information and National Orientation, Mohammed Idris, said the meeting took up the issues of the economy and the agreement reached between the government and the labour unions early this month to avert industrial action.
He said the issues were significant to the current realities and expectations of Nigerians on the Tinubu-led administration, adding that it was also hinged on the Renewed Hope Agenda.
‘’The issues raised at the meeting include economy, road infrastructure around the country, a memo about the agreement reached between the government and the labour unions, as well as the export processing zone revitalisation,’’ he said.
Mr Idris also disclosed that the meeting approved Mondays for the holding of the weekly FEC meeting instead of the Wednesdays adopted by the previous administrations.
‘’This does not, however, mean that it will hold every week. If there is any need to postpone it, that will be done and pending matters will be forwarded to the next Monday,’’ he said.
Also speaking the Minister of Labour and Employment, Simon Lalong, said that FEC gave approval for the agreement between labour and the government during the 2 October meeting.
‘’Presidential approval was given after analysing the agreement to provide for industrial harmony. Similarly, the 30-day implementation timeline agreed on was also approved by FEC,’’ he said.
About the Author
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
