In an interview with ARISE NEWS on Monday, Dr. Yemi Kale, Partner and Chief Economist at KPMG Nigeria, discussed the issue of fuel subsidies in the country.
The economist argued that in order to determine what is best for Nigeria, the government must consider the advantages and disadvantages of keeping subsidies in place.
He emphasized that while preserving subsidies would incur major costs on both an economic and social level, so would eliminating them.
Thus, his call for a “holistic” approach in its analysis.
According to Dr. Kale, the government should identify ways to compensate individuals who might be on the losing end if subsidies are eliminated in order to restore balance for the benefit of the country. He projected that the country would soon reach a point at which subsidies might become expensive.
According to Dr, Yemi Kale, “Let’s be honest. I think we are getting to a point, if we aren’t already there, that the conversation will not even be about, ‘Should we remove subsidy?’. It will be ‘Subsidy has to be removed because we just can’t pay for it anymore.’”
He continued by stating that the average Nigerian, whom it was originally intended to protect, would certainly bear a greater burden of its expense. He revealed that the Nigerian economy cannot continue to support subsidies in some areas because the subsidies regime for six months exceeds the budget allotted to infrastructure, education, and health in 2023.
All of this was done in light of the forecast that later this year, fuel prices will soar to around 750 naira per liter.