Nigeria: Ignore IMF on Removal of Petroleum Products Subsidy, Group Tells Buhari
By RAZAQ BAMIDELE
London, April 19, 2019 (AltAfrica)-A pro-democracy group, The Nigeria Voters Assembly has cautioned President Buhari and the leadership of the ruling All Progressive Congress (APC), not to embark on the withdrawal of subsidy on petroleum products or increase the prices of its product as being advised by the International Monetary Fund (IMF) and its Economists who benefit from subsidy removal both locally and internationally.
The Group in a release signed by its President, Comrade Mashood Erubami, urged the President to ignore the call at this time, saying it is improper and economically inexplicable for Nigeria to heed the IMF call when the country was just coming out of recession.
The group therefore condemned the call as a very dangerous form of anti-people structural adjustment policies which had not benefited any country in the past, except adding to their economic crisis and spreading poverty among the people with catastrophic consequences.
To avoid socio political crisis which might follow the removal of fuel subsidy if based on the IMF proposition that subsidy removal will yield to “more public spending that will be available to build hospitals, to build roads, to build schools, and to support education and health for the people.”
The proposal, according to the release must be noted that it is more certain that the economic reality of stagflation will follow which will drastically reduce purchasing power of the working class through increase in prices of goods in the market, increase in the cost of production, sky jump demand for salary increase from workers which may lead to staff rationalisation, poverty and subsequent hunger and anger.
The Group therefore enjoined the President and the leadership of the APC to sustain the present inherent subsidy which is otherwise called “under recovery” by the NNPC, in the fuel price regime which when sustained, will serve as a safety net through which dividend of democracy will get to the people to cushion the hardship that is being suffered presently with the fuel price at N145.
Nigerians are therefore urged to join hands with government to shun the urge to remove subsidy and rise revolutionarily to become strong safeguards against corruption fight-back.
Against the above backdrop, the group furtherprevailed on President Buhari and his administration to see subsidy as money being expended to keep prices below what they will otherwise be in a free market.
Such subsidy currently being paid should be financed from the “premium” from fuel sales abroad, that is, the positive difference between the fixed price of oil in the budget and the price at which it is sold in the International Market which is also known as Excess fund realised from the sale of crude oil abroad.
“Such excess revenue accruing from the profitable sales of crude should then be used to cushion internal subsidy, shared to States and local government councils with attached terms and conditions on how it should be prudently spent, to stabilize local Prices and save substantially in both the sovereign wealth Account and foreign reserve, investment into diversified areas of Agriculture, Manufacturing, good healthcare, and improved qualitative education for the old and Young,” the statement advised.
This, the group reasoned, is when Nigerians can be convinced with the reason for any future increase in fuel prices when occasion demands it, especially when crude oil prices slump at the market or the landing cost of fuel importation is higher than the current local selling prices.