Nigerian tycoon Aliko Dangote, president and Chief Executive of Dangote Group, has urged the Nigerian government to completely remove fuel subsidies, arguing that this will help determine the country’s actual fuel consumption and ease the burden on the economy.
Speaking on Bloomberg Television in New York, Dangote stressed that subsidies have cost Nigeria trillions of naira and were unsustainable.
The business tycoon explained that the removal of the subsidy could help to determine the actual petrol consumption in the country and also help cut down government’s unnecessary expenditure.
Analysts echo his sentiments, suggesting that ending subsidies could relieve Nigeria’s financial burdens and redirect funds toward essential social services such as healthcare and education. This shift would also foster a more investor-friendly environment by allowing market dynamics to dictate fuel prices.
Subsidy removal could stimulate infrastructure investment
The consensus among experts is that removing fuel subsidies could not only significantly benefit Nigeria’s economy by reallocating resources to vital infrastructure investments and reducing the fiscal strain caused by subsidy payments, but could also usher critical sector reforms towards market-driven economy.
Dangote pointed out the inherent risks of subsidization, stating, “Subsidy is a very sensitive issue. Once you are subsidising something then people will bloat the price and then the government will end up paying what they are not supposed to be paying”.
Editorial| Various Sources| Image: Bloomberg
