A financial expert, Chief Adegboyega Adegoke, on Sunday urged President Muhammadu Buhari not to waste more time but remove subsidy on petroleum because it is a waste of resources.
Adegoke said that the need to remove subsidy on petroleum by the current administration under Buhari is necessary because the existing subsidy is a waste which is not in the interest of the masses. He said that the existing subsidy where government spends billions of naira on petroleum subsidy annually is not in favour of the masses but the few rich.
Adegoke who is the Executive Director, Finance and Chief Financial Officer of OES Energy Services, made these declarations while speaking with journalists in Ibadan, the Oyo state capital.
DAILY POST gathered that Nigerian governors led by their Chairman, Kayode Fayemi had in July this year lamented that the federal government spent around N28.6 billion on subsidy in 2016. He added that the amount rose to N219 billion in 2017 and N345.5 billion by mid-2018, as the price of oil and domestic PMS consumption rebounded.
But, Adegoke while reacting, maintained that the billions of naira the federal government is spending annually on fuel subsidy has no positive impact on the poor because, it was meant to enrich the few rich.
Adegoke while speaking, said that the government should be sincere to remove the subsidy and spend the money to developed mass transportation, agriculture, built schools, hospitals that will be accessible to the masses, adding that that is the only way the people can benefit from the removal of the fuel subsidy.
He added that the growth of Nigeria may be a mirage because, government spends more on recurrent expenditure than capital expenditure.
“That is why I don’t support the subsidy. The basic thing that the federal government can do, which I don’t know if Buhari government can do it is to remove subsidy, because it is a waste. Subsidy is a waste. You said you are helping the poor, which poor are you helping, how many poor are you helping, how many poor owns a car? Okay, I own four or five cars, that means the federal government is subsidizing me to buy fuel into my cars.
“The poor that you are talking about enters public buses, what the federal government can use that money to do is to remove subsidy and invest the money in mass transportation, mass transit. And when I say mass transportation, I does not mean buying buses but build mono rail.
“So, that subsidy is enough to build mono rail. Mass transit, don’t buy buses to increase the number of buses on the roads that are already congested, build mono rail. So, if they remove subsidy and the government is sincere with it and use it to build mass transit, have a target instead of some people to pocket the money, billions of naira. You build the mono rail and get the private sector to buy the coaches.
“That is why I don’t support subsidy provided that they can spend it judiciously on infrastructural development. Power, if there is an improvement in power, it will reduce unemployment rate. Welder needs light, that is why all of them are riding motorcycles. If there is light, I can tell you that if you want to establish laundering and dry cleaning services, you will be thinking of how much you will use to buy generators. What KVA generator do I need to buy. Everybody needs power. What business do you want to do that you will not need electricity.
“The only problem that I see is that, any country that is spending more on recurrent expenditure than capital expenditure will not grow. That is the basic fact because capital expenditure is the one that will help you to develop and generate future income and revenue. If roads are bad and you spend ten hours you lost nine hours, that will affect productivity. Productivity will low. We are supposed to be producing but when you could not get to where you are going on time. Our problem in this country is that we spend more on recurrent than capital.
“So I agreed that the budget, there is a lot to be done. Look at the allocation to the National Assembly, it is recurrent, allocation to the Aso Rock is recurrent, but the one to hospitals, Roads, water resources, agriculture, is low compared to allocations and look at the allocations to national assembly and Aso Rock.
“How many local government are announcing their budget. We focus more on federal budget. Federal is just to support. We should also look at the budget of the state and local governments. So, we waste more time criticizing federal government budget and forget about the state and local governments. We should also look at how much they budget.”