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Remove fuel subsidy now, NECA tells FG

The Nigerian Employers’ Consultative Association (NECA) has urged the Federal Government to remove fuel subsidy, which has become a conduit pipe for the misappropriation of funds.

It argued that it subsidy was not sustainable, as the country cannot continue to fund inefficiency.

The association made the call, while reviewing the 2019 budget assumptions of the Federal Government.

It expressed apprehension about the capacity of the budget to move the economy out of the woods, create jobs and improve the human capacity potential of Nigerians.

President-General of NECA, Timothy Olawale, called for the elimination of resource wastages, perpetrated through the never-ending turnaround maintenance on the old refineries, encouragement of private investor in modular refineries and a total deregulation of the downstream sector.

Olawale, who took a cursory look at budgetary allocation to some critical sectors, raised some germane questions about the country’s readiness to address certain fundamental questions.

Acknowledging the importance of human capital development to the nation’s development, he said a holistic review of the budget assumptions is necessary ahead of the National Assembly’s duties.

The director general, who noted that the foundation on which the budget was built was worrisome, lamented that the budget was benchmarked against $60 per barrel of oil at 2.3million litres daily, an exchange rate of N305 to $1, an inflation rate of 9.98% and a GDP growth rate of 3.01 percent.

These assumptions, according to him, negate the reality of oil price volatility, stressing that oil industry experts had rightly warned that the political dynamics of the Middle East might drive down the price of crude.

He said: “True to prediction, a barrel of crude today sells for $54, $6 less than the benchmarked price and it is yet unknown how government will increase our present 2.09mbpd crude production to 2.3mbpd in 2019, and with OPEC’s resolution on cut in oil production, Nigeria’s daily production should now be 1.7mbpd.”

Olawale added that it is worrisome that education was allocated N462.24 billion, which is less than six per cent of the entire budget.

“This is a far cry from the UNESCO’s benchmark of 26 per cent of the national budget. A healthy nation is said to be a prosperous nation. The N315.62 billion, which represents a meagre 4.1 per cent of the budget, tends to negate this mantra.

“This allocation also contrasts to the pledge made by member countries of the African Union (AU) to commit a minimum of 15 percent of their annual budget to their health sector,” he said.