There Is No Provision In The 2016 Budget For Oil Subsidy Payment

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The Minister of Transportation, Rotimi Amaechi has reiterated the federal government’s stance not to pay any oil subsidy in 2016.

Amaechi speaking during a roundtable discussion on the Nigerian economy in 2016 said “if you know the president, he doesn’t support removal of subsidies, we are not saying it but you know it is there.

“We are not saying oil subsidy has been removed, but check it in the budget; it is not there so where would he pay from. And if you know the president very well he would not spend anything outside the budget” he said.

On his own part, the Managing Director and Chief Executive of Financial Derivatives Company Limited, Bismarck Rewane noted that while the fiscal strategy is intact, “what is missing is monetary strategy which has to be reinforced.

The exchange rate when the oil price was $114 cannot be the same exchange rate policy when the price of oil is $30. Exchange rate and interest rate policy when the yield was $91 per barrel cannot be the same when the yield is $5 per barrel.”

He stated that for the country to come out of its current economic state, the government has to spend which it seems to have made provision for in the proposed budget, adding that policy makers must also reduce uncertainty, have consistent policy.

He furthered that there must be incentive for businesses and policy maker should “not penalize people willingly” but encourage collective responsibility, ensuring that the country is competitive because “if other countries are doing it you have to do better if not you will most be a destination for investment.

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