Dr Bayo Olugbemi, President of the Chartered Institute of Bankers of Nigeria (CIBN), has advised the Federal Government to eliminate all subsidies and fully deregulate the economy in the long run in order to assure Nigeria’s success.
The call was made by Olugbemi, who is also the Chairman of the CIBN Council, at the official inauguration of ‘The CIBN Bankers Hall’ at The Polytechnic, Ibadan, Oyo State, on Thursday.
Recently, FG has approved an upward review of the budget amount for Premium Motor Spirit (PMS) subsidy for 2022 by N442.72billion, from N3.557 trillion to N4 trillion
The increase in fuel subsidy comes at a time of increased crude oil prices and as the FG abandoned plans to remove subsidy in 2022.
What CIBN is saying
Dr Bayo Olugbemi stated that it is not only the Nigerian economy that is in tumult, all over the world, there is a problem with the economies, with COVID-19 that is just abating.
He said, “Unfortunately, Nigeria is the worst hit probably because of our mono economy, meaning we have only one major revenue earning which is petroleum products.
“And, of course world pricing is a function of what the refined products would be. And as we know because of the war between Russia and Ukraine, the dollar price of oil is going up and definitely it has to affect the final products.
He added, “Unfortunately, we are not refining in Nigeria. We have to import using dollars and that is the reason why the government is giving subsidies; but for me as a person, as an economist, a banker and a financial expert in the long run, the best would be to diversify the economy and deregulate.”
“There shouldn’t be anything called subsidy because at the end of the day, it doesn’t percolate to you and I. The people at the top are the ones enjoying it.
“Government has no business with subsidies in the long run, it should deregulate the economy fully and ensure there are modular refineries.”
According to the CIBN president, the project, which is being carried out throughout Nigeria’s six geographical zones, marks the institute’s small contribution to the growth of banking and finance education in the country.
“The Institute is mindful of the fact that government alone may not be able to provide all the funding required to provide quality education especially at tertiary level.
“Revamping the educational system in Nigeria is therefore a collective responsibility and we all must play our role,” Olugbemi said.
What you should know
Following the approval of a revised 2022 budget by the Nigerian Senate on Thursday, what was also amended was an upward review of the budget amount for Premium Motor Spirit (PMS) subsidy for 2022 by N442.72billion, from N3.557 trillion to N4 trillion
Also approved, is a new oil price benchmark of $73 per barrel, a reduction in the projected oil production volume by 283,000 barrels per day, from 1.883 million barrels per day to 1.600 million barrels per day
Socioeconomic research firm, SBM Intelligence in its report titled “Growing fuel prices and transport costs: Which way Nigeria” said the costs of fuel subsidy increased by 890% over a five year period (2017-2021) in Nigeria even though fuel prices have only increased by 12.1%.
The report stated that between 2017 and 2018, the cost of fuel subsidy had increased by a whopping 405% yet fuel prices remained constant all through.
