An indigenous group, the Nigeria Natural Resource Charter (NNRC) has chided the federal government of Nigeria over huge expenditure on fuel subsidy.
NNRC said this in a document released on Thursday in NNRC’s 2019 Benchmarking Exercise Report (BER) tagged; ”Evaluating Petroleum Resource Management in Nigeria” and expressed that the expenses on fuel subsidy and called for total deregulation of the sector.
The organisation, a non-profit group maintained that the expenses poses a destabilising effect on public finance and erodes needed investment in human capital development.
The statement noted that the N750 billion spent on petroleum subsidy in 2019 was beneficial to the richest, while 20 per cent of Nigerians, but to the detriment of the majority of poor citizens.
“For every one naira that the Nigerian government (federal, state and local) earned in 2019, 0.136 kobo or about 13.6 per cent is allocated for subsidy,” the statement said.
It explained further, that subsidising fuel importation in order to peg the market price at N145 has led to a setback of the funds that could have been channelled to more important areas of the economy.
NNRC advised the government to map out strategies towards deregulating the downstream sector in the long term.
The group also urged the Government to invest in areas that would cushion the likely effect of subsidy removal.
It noted that the N450 billion budgetary provision for subsidy in the 2020 Budget was more than the entire capital expenditure in the provisions for Agriculture (N124bn), Aviation (N52bn), Education (N84bn), Health (N59bn), Industry, Trade and Investment (N38bn) and Water Resources (N91bn) respectively.
The report was jointly written by a team of research institutions which are; Centre for Public Policy Alternatives and Budget.
Others include Centre for Social Justice, Centre for the Study of the Economies of Africa, Social Action and We The People.
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