Hmmmm,IMF.............
They have advising Nigeria to remove subsidy since 1983,From the days of Major Gen Buhari in 1983 to Babaginda down to the present regime.
IMF is obsessed with the removal of subsidy on all items in Nigeria not minding the resultant economic hardship.
America is the biggest government in the world that subsidies its citizens,if Farmers don't sell enough or produce excess commodities,the govt will step in and mop the excess,if the student can't afford to pay his fees,the government provides a loan for them,and yet IMF will never ask the Us to stop subsidizing its students.
IMF forced Obasanjo to stop subsidizing education and that's what led to the Ali must go crisis in 77,yet these people will never learn.
I don't blame them though,Gen Buhari will never stop going cap in his hand to beg for more loans,like they say who who pays the DJ dictates the music,we can't have it both ways.
God bless Nigeria

promisedire:
Theoretically IMF conditions always looks good and aims to bring positive changes to the economy, however in reality it will definitely bring more hardship and problem to the average citizen …… removing subsidy should remove government expenditure but with the present economic situation, average citizen purchasing power has been reduced drastically. IMF na another modern colonizer; their condition is always bringing doom to our economy.

On the other hand, keeping subsides is a nice way of getting into more and more debt and stifling job growth.

Subsides work by government first setting the price of one liter of fuel (as an example) below the actual cost it takes to produce one liter of fuel

To compensate for losses in the cost of fuel..government pays a subsidy that covers for the loss.

The problem is, the cost of making that one liter of fuel, and transporting it , rises. So, government has to either pay higher to cover the increasing difference between government price for fuel, and actual production cost...or government reduces the amount spent on covering the loss...which means higher prices.

And these subsides are paid for in part by loans...due to the volatility of the cost (It happens in the power sector)

E get why IMF is telling us to remove it...they are tired of us taking loans from them to pay for subsides..

To

funshint:
I shiver anytime I hear IMF giving a country advise. Those people are demons!

Don't be surprised, they'll hearken to this advise.

atiku07:


All u said is true but only in theory. it will not work in Naija. Which companies will upgrade services ? u are very funny Naija companies are criminal in nature. No just deceive ur self those companies will make mad profit and end up rationing electricity for u forget it see for urself what those distiribution companies are doing even the oil companies will not build any stupid refinery they will rather buy it from outside and sell since it is all about profit.

Well, companies have to make profit because if they don't, they won't be able to make enough money to fix and upggrade and expand things (which is why in the power sector...people still have to buy cable , for the discos because the discos are not making enough due to subsidy)

Plus, if companies don't upgrade their services, they would go out of business.

The truth is Naija is not yet ripe for those stupid advices by IMF. You want subsidy to go yet u have bad currency and a very low salary forgetting the fact you are a consuming nation and not a producing one, see ehn! u are wicked no be small. subsidy never waka small wey dem comot see where we are! inflation every where u all sit in comfort of diaspora or claiming experts consenting to some theoretical stupidity without looking at the realities on ground.

1.We have a bad currency because we spend a lot of our revenue on paying for subsides to cover the losses made from keeping prices low...meaning no forex to buffer the currency

2.Also we have a bad currency because the price of what we earn is never at a level that can sustain our large populaiton, and the same goes for agriculture and minerals.

3.We also import and import all things...even stuff we make...which makes us lose more and more forex...and thus gives us bad currency and inflation.

Whereas if we remove subsides...not only would we save more money...we would attract more money because it would now be attractive to invest in Nigeria...more money flows in, economy benefits.

See GSM. It isn't subsidised...so as a result...it is growing, jobs have been and are being created, and it is earning us a lot in taxes.

IMF should geddifeck, Everytime them and their careless advice.
Even restructuring policy of the late 1980s that wrecked African economies still has rippling effect till now, you are still advicing.
Na bad leadership for our side cause am, the day Africans begin to think for themselves we would never be the same.

There is wheat subsidy in the US.
There are different forms of subsidies in other western,ultra capitalist countries;but they always come and tell us there shouldn't be subsidy for anything.
Even just now in the UK with soaring gas prices,the goverment is subsiding it.
They stopped telling the Chinese what to do when inspite of their socialist policies,they now have produced a mega mount of an economy,bigger than all western nations and soon to surpass that of the US.
NO WESTERN Nation would not fall into instability if they see the kind of price rices happening in Nigeria.

thebosstrevor1:
Las las, na una go suffer.



The IMF controls Nigeria. The IMF are the ones saying they should remove every government subsidies on products while developed countries are told to keep their subsidies

1.Developed countries don't subsidize petrol and power like we do. A liter of petrol costs far more in the US and UK than it does in Nigeria.(and both of them are oil producing nations)

2.Where subsides exist, they are for the poorest of the poor...and they are paid out of tax revenue. Here in Nigeria we pay for subsides from our oil revenues...which is why we have forex issues...and from loans. Not from taxes. (And developed countries have tax to gdp ratios of at least 30% . Nigeria is at 6.1%. )

funshint:
I shiver anytime I hear IMF giving a country advise. Those people are demons!

The only give to country without self worth.
Country always borrowing and country that don't think

backbencher:
On a more serious note, removing subsides on fuel and power means two things

1.Government stops spending money on subsides...which means that more money gets saved...plus due to investment flowing in, there is more taxable income from jobs and company earnings..more money for government

2.Second, since there is no subsidy, the electric and power companies now work at a profit, which means they would earn enough money to build more refineries, power stations, etc. They would also be able to afford to buy cables, wires, transformers , so that power customers can stop buying those things. And there would be foreign investment because now people can make profits in the sector...and finally more and more jobs.

Finally, a note on subsides.

Government controls the price of power and petroleum...which they set below the cost of productionmeaning that power and petrol companies run at a loss...meaning that subsides have to be paid to keep the companies from going bust.

But because the cost of production rises, and is never static, the government sometimes has to reduce the amount spent on subsidies to save money...and that manifests as a price increase.

The ideal would be for subsides to go and price to be in the hands of companies in the petrol and power sector...so that they earn profits to fix and upgrade services....and also competition would bring down prices.

The high price aspect of removing subsides...and the knock on effects (food price increase for example) is why most Nigerians oppose subsides. That shock can be mitigated by government doing as was done in some other countries..paying some money to car owners to mitigate subsidy related rises.

But GEJ tried doing it and APCHEAT thugs staged protests
Cc AfonjaConehead helinues Afamed

How many times will Nigeria government remove fuel subsidies?

LZAA:

But GEJ tried doing it and APCHEAT thugs staged protests
Cc AfonjaConehead helinues Afamed

Because politicians always take advantage of a good crisis to create havoc.(as you can see here, most Nigerians don't support subsidy removal...and Tinubu and Buhari took advantage of the anger to ride into power...even though they knew more than any other..especially Tinubu with his investments in the oil sector..how harmful subsidy can be. That's why politics is a game of cunny. A lot of cunny.)

Me i was no fan of PDP, or even APC or Buhari...but 2012 was the year I recieved sense on subsidy matter...especially after a lot of government people under GEJ explained why it was harmful. Before 2012, i was pro-subsidy..and anti-IMF..

Ur not in the system that is why ur thinking like this....
In short u don't even need to be in the system.. It common sense involving business. Nothing peculiar to Nigerian companies... Telecommunications industry is the most booming sector in Nigeria after oil and gas because obasanjo refused to subsidies it when it was luxury years ago...
Although the services are not world class..but there are significant investment in that industry Dan power or oil and gas...
At least anywhere u go in Nigeria.. If u go around Nigeria u should get average network availability from one of the 4 major networks because they are independent and are able to sustain the major companies that provide and maintain masts

Ur not reasoning on a long term...
Those policies recommended by IMF is what is needed for sake of tomorrow not even today...the more we keep ignoring it the more the cost of maintaining the old methods (subsidies) become high and the more we keep losing investment...

Subsidies can not be sustained anymore ...it has nothing to do with European or Africa...
Can't u see the glaring differences between power and petrol in ghana ,south Africa and in Nigeria

Have u taken out time to ask ur self if they pay subsidies over there..the answer is No

atiku07:


All u said is true but only in theory. it will not work in Naija. Which companies will upgrade services ? u are very funny Naija companies are criminal in nature. No just deceive ur self those companies will make mad profit and end up rationing electricity for u forget it see for urself what those distiribution companies are doing even the oil companies will not build any stupid refinery they will rather buy it from outside and sell since it is all about profit.

The truth is Naija is not yet ripe for those stupid advices by IMF. You want subsidy to go yet u have bad currency and a very low salary forgetting the fact you are a consuming nation and not a producing one, see ehn! u are wicked no be small. subsidy never waka small wey dem comot see where we are! inflation every where u all sit in comfort of diaspora or claiming experts consenting to some theoretical stupidity without looking at the realities on ground.

backbencher:
On a more serious note, removing subsides on fuel and power means two things

1.Government stops spending money on subsides...which means that more money gets saved...plus due to investment flowing in, there is more taxable income from jobs and company earnings..more money for government.

Hi Backbencher, I want to understand something, does government subsidy prevent investment from flowing in? I want understand how the subsidy removal will bring in more investment basically.

backbencher:


1.Developed countries don't subsidize petrol and power like we do. A liter of petrol costs far more in the US and UK than it does in Nigeria.(and both of them are oil producing nations)

2.Where subsides exist, they are for the poorest of the poor...and they are paid out of tax revenue. Here in Nigeria we pay for subsides from our oil revenues...which is why we have forex issues...and from loans. Not from taxes. (And developed countries have tax to gdp ratios of at least 30% . Nigeria is at 6.1%. )

They do.

There is subsidies on agriculture in both America and Europe.

In the United states for instance, petrol subsidies is around $20.5 billion annually, which is $14.7 billion in federal subsidies and $5.8 billion in state-level.incentives.

Also, About 2.1 million farmers in the United states receive subsidies.

seborrhic:
There is wheat subsidy in the US.
There are different forms of subsidies in other western,ultra capitalist countries;but they always come and tell us there shouldn't be subsidy for anything.
Even just now in the UK with soaring gas prices,the goverment is subsiding it.
They stopped telling the Chinese what to do when inspite of their socialist policies,they now have produced a mega mount of an economy,bigger than all western nations and soon to surpass that of the US.
NO WESTERN Nation would not fall into instability if they see the kind of price rices happening in Nigeria.

The Western countries also pay for their subsides with higher tax rates.(the US has a tax to gdp ratio of 34%, uk 33% , Nigeria, 6.1%)


Nigeria? Our subsidy is paid for from oil revenue, which isn't enough, and is supplemented by loans (especially in power, where half the subsides are paid for via loans). Not from taxes.

backbencher:


The Western countries also pay for their subsides with higher tax rates.(the US has a tax to gdp ratio of 34%, uk 33% , Nigeria, 6.1%)


Nigeria? Our subsidy is paid for from oil revenue, which isn't enough, and is supplemented by loans (especially in power, where half the subsides are paid for via loans). Not from taxes.

You first claimed there is no subsidies in the United states, now you claiming they pay subsidies from higher taxation

God punish IMF!!!it only subsidy removal those economists know.let government make the refineries work first,create enabling environment to generate jobs first,improved on infrastructures, security,cut down on imports by using homegrown alternatives,improve on exports of finished goods...then you can remove fuel subsidy.
I am not an economist ooo!just using common sense.

thebosstrevor1:


They do.

There is subsidies on farmers in both America and Europe.

In the United states for instance, petrol subsidies is around $20.5 billion annually, which is $14.7 billion in federal subsidies and $5.8 billion in state-level.incentives.

About 2.1 million farmers in the United states receive subsidies.

1.Again the subsides are paid for via taxes. Nigeria pays for subsides via loans and our dwindling oil revenue...which has never been at a point where it can sustain us (as at 2019, we need oil to be at $133 PER BARREL to run a balanced budget).

2.Also, the subsides are paid to farmers to compensate them for losses sustained by competition from agricultural imports from foreign countries with cheaper labor costs.(like Nigeria , ironically).

3.Petrol subsides in the US go to the poorest of the poor...not to everyone. ( and it costs 407 naira per liter for fuel in the US. In the UK it is 807 naira...and the UK is an oil producer.)

PrinceOfLagos:
Does the president listen to advice ?

He doesn't listen to anybody

If he follow dem advise now ! Na you go first create a thread on this forum shouting # The Evils of Bouhari #

thebosstrevor1:


You first claimed there is no subsidies in the United states, now you claiming they pay subsidies from higher taxation

Because you did not read my comment well

They don't have subsides for everyone...just for the poorest of the poor.

This is as simple as A B C. Get the freaking refineries working and produce our own petrol which will even create more jobs. But because of corruption, the govt will continue to Play politics with the economy. As a matter of fact, we have abundant sunlight in this country. What is stopping the govt in enhancing Solar energy as a source of electricity? This is just secondary school economics.

backbencher:


1.Again the subsides are paid for via taxes. Nigeria pays for subsides via loans and our dwindling oil revenue...which has never been at a point where it can sustain us (as at 2019, we need oil to be at $133 PER BARREL to run a balanced budget).

2.Also, the subsides are paid to farmers to compensate them for losses sustained by competition from agricultural imports from foreign countries with cheaper labor costs.(like Nigeria , ironically).

3.Petrol subsides in the US go to the poorest of the poor...not to everyone. ( and it costs 407 naira per liter for fuel in the US. In the UK it is 807 naira...and the UK is an oil producer.)

What are you writing down...keep making up stuff.

1.Subsidies and tax breaks are given to the oil companies to make them cheaper for Americans.

2. Subsidies are given to farmers in both america and europe to make their produce cheaper for export.

3.petrol subsidies goes to all the oil companies so that they can sell their oil cheap to all consumers

backbencher:


Because you did not read my comment well

They don't have subsides for everyone...just for the poorest of the poor.

Really, so you mean to say, poor people have their own stations for getting cheap oil

thebosstrevor1:
Las las, na una go suffer.



The IMF controls Nigeria. The IMF are the ones saying they should remove every government subsidies on products while developed countries are told to keep their subsidies

They only want Nigeria to raise money to pay back the loans even if people are suffering
Government can’t give job it makes no sense and it’s not done anywhere,government should fix ELECTRICITY and give more attention to small scale businesses,unemployment will be history in no time if this can be done
Fuel subsidies should removed,it’s a scam

IMF conditions might have actually worked out in some of these western countries (No Doubt) but you see Africa economy is kinda unique! Especially Nigeria own; there are other important issues we should consider other than focusing on subsidies removal … subsidy removal in the long run will bring a positive effect � but ignoring the current realities will create impediment and further chaos economically which will certainly affect the goal of subsidy removal;

Plus saying it will create more jobs now is a lie; it should ooo but it won’t, with the way Naija dey go so na lie …, we will pay more whereas we are earning little … we should just stop falling for some beautiful economic jargons which we have been blindly implementing on our economy and has failed to produce needed result

crazygod:
This is as simple as A B C. Get the freaking refineries working and produce our own petrol which will even create more jobs. But because of corruption, the govt will continue to Play politics with the economy. As a matter of fact, we have abundant sunlight in this country. What is stopping the govt in enhancing Solar energy as a source of electricity? This is just secondary school economics.

The refinereis don't work because of subsidy

In order to keep fuel prices cheap...government since the 1980's has been forcing refineries to refine fuel at a loss, and to sell it at a loss..and marekters to transport the fuel at a loss. The money paid to cover such losses is called a subsidy.

And because the cost of making a liter of fuel and transporting it is not static....the amount needed to pay for the subsidy rises year in year out. Government of course cannot afford to pay higher.

Which means no profits made, and thus refinereis cannot be repaired on time, or upgraded when needed...so they fail. And here we are.

The reason why you have GSM is because Obasanjo refused to subsidse it...despite people screaming about how the GSM companies were exploiting us...meaning they make enough profit to expand and upgrade services.

thebosstrevor1:



What are you writing down...keep making up stuff.

1.Subsidies and tax breaks are given to the oil companies to make them cheaper for Americans.

Not all Americans, some poor americans...and they are paid for by taxes.

2. Subsidies are given to farmers in both america and europe to make their produce cheaper for export.

No, to compensate them for losses made when they have to compete with cheap imports. AND to compensate them for losses...plus they are paid from taxes, not from oil revenue

3.petrol subsidies goes to all the oil companies so that they can sell their oil cheap to all consumers

No, they go to the poorest of the poor to help them afford petrol..and one has to qualify for it.

Petrol prices in the US and UK rely heavily on the market price...not on subsides..plus with fuel at N407 in the US, AND n809 IN THE UK...that's not cheap.

funshint:
I shiver anytime I hear IMF giving a country advise. Those people are demons!

It's not.their fault. They should post one IMF staff here to live in Lagis.and hear how much a river of yam is. .

God, Thunder, electricity , fire go descend on IMF and destroy.them.

Thunder fire them all..
.

Flier:
They only want Nigeria to raise money to pay back the loans even if people are suffering
Government can’t give job it makes no sense and it’s not done anywhere,government should fix ELECTRICITY and give more attention to small scale businesses,unemployment will be history in no time if this can be done
Fuel subsidies should removed,it’s a scam

Unemployment can't be a history, even if government pay attention to small scale businesses, employers will still employ those who they can pay salaries to.