Economic experts have identified pensioners and state workers and others as groups that will benefit immediately from the removal of fuel subsidies.
The experts who spoke at the Nairametrics' second quarter, Q2 2023, Economic Outlook Webinar include Chief Economist at KPMG Nigeria and former Chief of the National Bureau of Statistics (NBS), Dr Yemi Kale, Partner and Chief Economist at PwC Nigeria, Dr Andrew Nevin and Head of Economic Research/Intelligence at the Coronation Merchant Bank, Chinwe Egwim.
Nevin said: "The government has a culture of being unable to pay pensioners. We all know the fuel subsidy is a form of corruption and the fuel subsidy benefits those in the upper and middle class and those who lose are the pensioners and the state employees, as state governments cannot pay their minimum wage. Those groups are going to benefit immediately from the removal of the fuel subsidy," he said.
Nevin also advised young Nigerians to look at the fuel subsidy removal as an opportunity to look out for the healthcare and educational sectors.
According to him, with adequate training, young Nigerians can seek jobs in both sectors whether in Nigeria or other countries. He also said that there are many opportunities for investments in both sectors. On her part, Egwim, advised young Nigerians to always have their pulse on market dynamics because they will be able to find relevant opportunities in this manner.
She further stated that the fuel subsidy removal should be able to support Nigeria's revenue performance. She admitted that there will be an inflationary impact from the policy, and purchasing power will be eroded in the short term.
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However, if the policy is implemented properly, the fuel subsidy removal will mean better economic performance for Nigeria. Ms. Egwim who highlighted the oil and gas sector as one of the credible sectors which can improve the country's overall economic growth, said that the Tinubu administration should focus on the following to improve sector performance:
But Dr Yemi Kale raised concerns about the potential negative impact of additional taxation on household expenditure and private business expansion.
Highlighting the challenges of imposing higher taxes during a period of fragile economic growth, Kale said: "In terms of public finance, I am one of the few people that does not believe in increasing taxes. I'm not one of the people that is a fan of pushing up taxes, particularly in a recession and when the economy is struggling with fragile growth," he said.
