thebosstrevor1:


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

No, ID, plus vouchers...shown at participating fuel stations (i guess it is like the food voucher system).

We spent N2 trillion on subsides this year. That's money that could have gone elsewhere

Finally before you quote me again...I have a question for you.

You are selling coke at N100 per bottle, after buying from factory at N70 PER BOTTLE. Government comes in and tells you to sell the coke at N20 per bottle..the coke you buy at N70, and pays you a subsidy of N10 per bottle sold..meaning you lose N40 PER BOTTLE...WOULD you be happy?

backbencher:


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



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



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.

Have a good day, typing rubbish down

thebosstrevor1:


Have a good day, typing rubbish down

Good afternoon.

To further improvish Nigerians ! Nothing like job creation.

The complete removal of regressive fuel and electricity subsidies is a near-term priority, combined with adequate compensatory measures for the poor.

The compensatory part is the big deal. Adequate compensatory measures for the poor will remain a mirage due to systemic corruption.

This country doesn't have steady power(electricity) . If the government fix power issue, businesses will flourish but if they don't fix it and still go ahead to remove fuel and electricity subsidy then SME's will suffer alot.

The IMF advice is right in a saner/transparent system where everything works. You can not remove subsidy with the current minimum wage, the country with no subsidy works on minimum wage year in year out. The two bodies(nnpc/phcn) should be a total independent bodies.

Chieffoo007:
Davido For president 2023

and u believe this? smh

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.

I have worked on Govt projects and sat down as FG representative on meetings with these foreign experts that I can tell you all that you are conjuring doesn't work that way in Nigeria.
Nothing much will change but more hardship for Nigerians, all those we will be creating millions of jobs from implementing IMF recommendations is nothing but arrant nonsense and balderdash

This is satanic move by the IMF, we are going to resist such move next year. Buhari should kindly ask Jonathan how far during his regime when he tried to remove fuel subsidy.

Government must operate with a human face, that is why it is even called democracy; Government of the people, for the people. At any point Government ceases to operate with a human face, it becomes autocratic. If you remove subsidy on fuel and electricity, how will the people cope with rising inflations? I will bet you that salaries will not be increased, even if there is any increase at all, it will be marginal and the inflation will erase any gain.

Guyman02:


I have worked on Govt projects and sat down as FG representative on meetings with these foreign experts that I can tell you all that you are conjuring doesn't work that way in Nigeria.
Nothing much will change but more hardship for Nigerians, all those we will be creating millions of jobs from implementing IMF recommendations is nothing but arrant nonsense and balderdash

On the other hand

1.We have spent over N1 trillion on subsides...

2.Oil revenue is not at the level where we can afford to be paying subsides...which means...we have to take loans (and the subsides in the power sector are partly funded by loans)

3.We don't have good refinereis because subsidies means that NNPC cannot make enough profit to pay for refinery repair, upgrade, and new refinereis, since all the money that would have gone there goes on subsidy.

4.Same for power.

5.At the end of the day, we spend more on keeping prices of petrol and power low...we end up taking more loans, since oil price is not high as we want it.

6.Did i mention that oil has to be at least $100 per barrel before we can see any benefit ?

Useless world powers!

Give more jobs or give more businesses

Its in their own interest. They want more profits for their economic agents

They don't care what the consumers are going through to pay for what they don't enjoy.

Consumers pay more. They don't get commensurate value for their money. No body is addressing the poor infrastructure for these products. They just want the poor the poor population to pay more and more. What their own people will not tolerate.

Poverty driven policies


.

BeeBeeOoh:


https://dailytrust.com/imf-tells-fg-to-remove-fuel-electricity-subsidies

BeeBeeOoh:


https://dailytrust.com/imf-tells-fg-to-remove-fuel-electricity-subsidies

Hahaha lets watch and see.

Instead of the useless IMF to talk about excessive corruption in the system and how to curtail it,they are talking about subsidy removal as if that will change anything under this corrupt system. How do you saved without blocking the loophole under which our patrimony are stolen.

Billions of loans collected under the guise of infrastructural development cannot be accounted for ,is now subsidy that will be utilized? IMF means the same thing to everything wrong with this country.

What IMF is saying is just common sense. Nigeria is going the way of Venezuela and Argentina. It is so glaring even with my basic knowledge of economics.
Sane Countries that provide subsidy do it in social services like education, health, public transportation etc but this countries have very high taxation rate that can go up to 60% of ones income and the market determine the prices and not govt.

Govt job is regulation which is to prevent any person from gaming the system or forming cartel unfortunately Nigeria is a member of the opec cartel.

Govt should provide services to companies that would make then internationally competitive e.g High quality workforce, research, efficient service to bussines etc

The Nigerian government first have to be completely transparent with it finances, With monthly information about who get what and the purpose it for. This would build citizen trust in the system and then gradually phase out subsidies maybe on monthly basis till it is completely removed.

Labour union law should be modified to meet international best practice examples would be providing unemployment benefit for a fixed period of time if a union member loses is job.

Build a robust citizen credit rating system and ensure that rent and other bills are paid monthly with one month deposit, govt should bare the cost of possible one month default and then retrieve it from the defaulter while putting that info on the person credit info which is available to everyone.

I can keep going on and on

State capitalism can only work in an authoritarian society and/or a very very transparent (less corrupt) society

IMF of doom!!!

How, where, when who

Ajala is a brainless, spineless fool and he will always do what his IMF masters tell him to do.

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

Cognitivereason:
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

Comparing the Telecommunication sector to the oil sector is not as straight forward as we think. Truly, the telecoms sector was not subsidized, but then again their products were not a necessity for Nigerians. If you couldn't afford it then, you stayed away. So you really cared less whether it was subsidized or not because you didn't have to use the products. But it is a different ball game with fuel. There is no running away from it. From providing power for your self to transportation, you have no choice but to use fuel. Not to mention the high cost of goods, as increase in transportation cost will be factored into the cost of production. Just like diesel, not many people use diesel, so the removal of subsidy was easily accommodated.

With the lean disposable income of the average Nigerian, you are talking of fuel subsidy removal. Not only that, you want to also remove electricity subsidy when not everyone has been metered. And you are talking of curbing insecurity. Ok o

jeffoe:
What IMF is saying is just common sense. Nigeria is going the way of Venezuela and Argentina. It is so glaring even with my basic knowledge of economics.
Sane Countries that provide subsidy do it in social services like education, health, public transportation etc but this countries have very high taxation rate that can go up to 60% of ones income and the market determine the prices and not govt.

Govt job is regulation which is to prevent any person from gaming the system or forming cartel unfortunately Nigeria is a member of the opec cartel.

Govt should provide services to companies that would make then internationally competitive e.g High quality workforce, research, efficient service to bussines etc

The Nigerian government first have to be completely transparent with it finances, With monthly information about who get what and the purpose it for. This would build citizen trust in the system and then gradually phase out subsidies maybe on monthly basis till it is completely removed.

Labour union law should be modified to meet international best practice examples would be providing unemployment benefit for a fixed period of time if a union member loses is job.

Build a robust citizen credit rating system and ensure that rent and other bills are paid monthly with one month deposit, govt should bare the cost of possible one month default and then retrieve it from the defaulter while putting that info on the person credit info which is available to everyone.

I can keep going on and on

State capitalism can only work in an authoritarian society and/or a very very transparent (less corrupt) society

Great post.!

I would add

1.OPEC is not as strong as it used to be. More and more non-OPEC members are finding oil.

2.Right about state capitalism working in an authoritarian society..and they do that largely by keeping labour costs down (That's how many communist countries work..and it failed most of them)

3.What Nigerians fear about subsidy removal is food price increases. (That's why Obasanjo got away with not subsiding GSM...GSM does not directly affect food prices in the same way a potential increase in fuel prices would..)

4.Nigeria also subsidizes education and healthcare.

The simple truth is that they have spent the last 30 years destroying the energy sector under the guise of subsidy and now they want to push the financial implications of their mismanagement on the ordinary Nigerian.

jeffoe:
What IMF is saying is just common sense. Nigeria is going the way of Venezuela and Argentina. It is so glaring even with my basic knowledge of economics.
Sane Countries that provide subsidy do it in social services like education, health, public transportation etc but this countries have very high taxation rate that can go up to 60% of ones income and the market determine the prices and not govt.

Govt job is regulation which is to prevent any person from gaming the system or forming cartel unfortunately Nigeria is a member of the opec cartel.

Govt should provide services to companies that would make then internationally competitive e.g High quality workforce, research, efficient service to bussines etc

The Nigerian government first have to be completely transparent with it finances, With monthly information about who get what and the purpose it for. This would build citizen trust in the system and then gradually phase out subsidies maybe on monthly basis till it is completely removed.

Labour union law should be modified to meet international best practice examples would be providing unemployment benefit for a fixed period of time if a union member loses is job.

Build a robust citizen credit rating system and ensure that rent and other bills are paid monthly with one month deposit, govt should bare the cost of possible one month default and then retrieve it from the defaulter while putting that info on the person credit info which is available to everyone.

I can keep going on and on

State capitalism can only work in an authoritarian society and/or a very very transparent (less corrupt) society

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.

Your first paragraph, why are they saving money for?

To service loan or to loot?. Bro we are damned

AllahIsShit:
The simple truth is that they have spent the last 30 years destroying the energy sector under the guise of subsidy and now they want to push the financial implications of their mismanagement on the ordinary Nigerian.

Yes, subsidy was a bad decision, economically speaking.

But every time government suggested complete subsidy removal..from 1993 to date, Nigerians have always said NO. (That's why even people like Abacha never contemplated subsidy removal totally).

All government can do is to reduce subsidy payments from time to time when the cost of producing petrol rises. (which manifests as a price increase...and which means all is well, until the cost of producing a liter of fuel rises again)...ie periodic partial subsidy removals...which have happened several times for over 3 decades.

Now we are a t a point where falling oil prices means it has to go....or we keep on taking more loans (which IMF doesn't want us to do, because they are tired of us doing so).

Common op will u change the "tell" in your topic to "order"

It supposed to be IMF orders Nigeria

This is why some persons here keep on declaring that Nigeria is not yet independence, it is not a country!

SUGARCyprian247:


Your first paragraph, why are they saving money for?

To service loan or to loot?. Bro we are damned

1.We are taking loans for the simple fact that we are a resource dependent nation. Roughly spekaing....we earn money from selling raw materials and we import goods in excess of what we earn..and that was the position of things before oil came around.(We got away with it in the 1960's and 70's partly because we didn't have too large a number of people dependent on imported stuff. Now we do).

2.Savings are also needed to 1) buffer the value of the naira 2) pay for lots of things...loans, services, etc 3) have a reserve for the rainy day.

IMF has been the cause of Nigerian problems since the time of babangida... Remove subsidy and create job out of tin air... Awon weerey

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.

You are a typical demonic Nigerian politician..... People buy transformers, poles etc for their community, did NEPA ever considered those facilities as community facilities? All the money saved from looting , no government has ever accounted for it . now you want me to believe that when subsidies go ,everything will fall in place...to me ,you just wrote jargons. Paper jargons as usual

PrinceOfLagos:
Does the president listen to advice ?

He doesn't listen to anybody

Ignorant Wailers if the President listens to IMF & removes the subsidies you will be @ the front of the queue, yeh help us o, President Buhari wants to kill us in Nigeria? Hypocrite.

backbencher:


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.



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.

How many has the the subsidy removed so far in electricity attracted?

Fourwinds:



You are a typical demonic Nigerian politician..... People buy transformers, poles etc for their community, did NEPA ever considered those facilities as community facilities? All the money saved from looting , no government has ever accounted for it . now you want me to believe that when subsidies go ,everything will fall in place...to me ,you just wrote jargons. Paper jargons as usual

Nothing like NEPA it belongs to Private companies, Eko Electric, Ikeja Electric, Bedc, ibedc & co, same people like you that are here on Nairaland.