By Adekola Afolabi, Victor Akinkuolie, Babatunde Ayedoju, Jimoh Ahmed, Samuel Edu, Adedotun Aderoboye & Kayode Afolabi
Nigeria’s economy may be heading towards the rock over subsidy payment, prominent stakeholders have warned.
They issued the warning following the caution from the Edo State Governor, Godwin Obaseki that Nigerian governments may not be able to pay workers’ salaries beyond June this year unless fuel subsidy is removed
They said the Governor’s message must be taken seriously, as a critical stakeholder in the country
Governor Godwin Obaseki on Monday, said the Federal Government might not be able to pay workers’ salaries beyond June 2023 without resorting to massively printing money or removing fuel subsidy.
A former Deputy National President, Nigeria Labour Congress (NLC) Comrade Joseph Akinlaja said the words of Obaseki did not only expose the current state of the nation but calling everyone’s attention to what could happen soon.
His words: “As a member or attendee of federal executive council meeting, Obaseki must know what he was talking about because he has more information than us who did not attend the meeting. Even without being a member of the council, I believe what he said may not being spent far from the truth.”
“The billions and trillions we spend on subsidy is going to impact negatively on the economy as a whole because the subsidy is beneficial to middlemen than the masses the policy was targeting. Printing more naira will weaken our currency.
When there is more money in the system but it is not worth more than a toilet paper, the economy will also be affected. You might have more money to pay workers’ salaries but the salaries will be worthless.”
Akinlaja called on the federal government to revive Nigeria’s refineries and put an end to power failure in the country in order to have control over the price of petroleum products and make life more meaningful for Nigerian workers without necessarily increasing salaries.
Dr Chris Ofonyelu from the Department of Economics, Adekunle Ajasin University, Akungba-Akoko noted that the fuel subsidy should be removed because it is rooted in fraudulent.
Ofonyelu stated that the 2023 budget is based on deficit, adding that while a new administration is coming in, the outgoing administration is trying to exhaust all the liquid revenue on ground.
An Ado-Ekiti based Economic expert, Dr Ajayi Ademiju, observed that the real problem Nigeria has, is the policy it undertakes.
According to him, “In economic terms, Nigerians should not be paying for subsidy. Unfortunately, the Nigerian government is forced to pay subsidy.
Similarly, a Senior Lecturer at Bamidele Olumilua University of Education, Ikere-Ekiti, Dr Frederick Onipinla, said “I’ve listened to Governor of Edo state’s comments and also a number of international organisations such as IMF submissions about why subsidy should be removed. Another submission they’ve made is about why the Nigerian government should stop borrowing.
” When Obaseki talked about printing money, he spoke in technical terms, not printing physical money; that will of course induce inflation.
“Officially we have debt of 46 billion dollar, but there are ways and means and between 2019 to 2022, the cost of servicing debt only advances collected from CBN not to pay back, was over N4 trillion; just to service that debt that goes to CBN.
Also, a commercial law expert, Mr Ajayi Eleyinmi, said, “Obaseki is an investment banker who had in the past, talked about this issue about three/four years ago and everybody vilified him.
”We have seen the agenda of the incoming government and I ask where is the money. Don’t be surprised if we go back to ways and means again of funding by the incoming government because if you look around, where is the money going to come from? “Governor Obaseki said it is either printing of money or subsidy is removed.
Meanwhile, labour leaders have called on the federal government to ensure there are functional refineries in the country before removing the subsidy.
They equally demanded that part of the money to be gained from subsidy should be channelled on increment in workers’ salary.
In separate telephone interviews with The Hope, the labour leaders including the Ondo State Chairman of the Nigeria Labour Congress (NLC), Comrade Victor Amoko and the Assistant General Secretary of the Nigeria Civil Service Union (NCSU), Comrade Gbenga Olowoyo, also described Governor Godwin Obaseki of Edo State’s comment as a joke taken too far.
Comrade Amoko, however, threw his weight behind removal of fuel subsidy, saying if it is not removed, the money being paid as subsidy will continue to go into the private pockets of few people, and the masses will continue to suffer.
“So, we believe that increment in workers’ salary is one of those things that they are going to use the money for because if they remove the subsidy there will be a hike in PMS, and if there is a hike then workers need something to cushion the effect of that increase.
“So, I believe by the time they invite all the stakeholders, these will be discussed. Increment, health, education, security, and others will be parts of the issues.
On his part, the Assistant General Secretary of the Nigeria Civil Service Union (NCSU), Comrade Gbenga Olowoyo, criticized government, saying government policies are always at variance with public interest.
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