The Manufacturers Association of Nigeria (MAN) has reacted to the recently-approved N4 trillion by the House of Representatives, saying it will ruin the country’s economy.
This is sequel to a request by President Muhammadu Buhari for revision of the 2021 fiscal framework, the lawmakers, on Thursday, April 14, 2022, approved the petrol subsidy fund in spite of public outcry.
In forwarding the request for the revision of the Medium Term Expenditure Framework, the President requested the lawmakers to approve an additional N3.557 trillion in addition to the N442.72 billion provided in the 2022 budget for subsidy.
The House also approved the reduction in crude oil production quota from 1.8million barrel per day to 1.6 million barrels per day and a $73 oil price benchmark.
Arguing that placing much importance on petrol over issues of health and infrastructure was misdirected, MAN President, Mansur Ahmed maintained that subsidy is a yoke on the Nigerian economy.
His words: “We believe that subsidy is a yoke on our economy. First of all, the social sector is critical. Maybe people feel that fuel is so important, but if you compare it with health, education, and security, you will notice it is nowhere near them.
“There are inefficiencies and leakages, but that is because of subsidy. Government should invest that money in infrastructure, health, and education. The money will make a bigger impact on the economy when invested in those critical areas, but what impact will subsidy make on the economy, and what impact has it made so far?”
Corroborating Ahmed’s claim, an economist and Chief Executive Officer (CEO) of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf expressed conviction that the petrol subsidy approval will lead to higher debt service, an increase in fiscal deficit, increasing inflationary pressure, and even naira depreciation.
“With this development, our macroeconomic outlook in the near term should be a cause for worry. The outcomes of these approvals include increased borrowing, higher debt service, surge in fiscal deficit, heightening inflationary pressure, and a risk of further depreciation in the naira exchange rate,” Yusuf added.