Nigeria needs to re-evaluate its policy on subsidy

Prof. Uchechi Ogbuagu of the Department of Economics, University of Calabar, on Monday, called on the Federal Government to re-evaluate its policy on subsidy of some commodities.
Ogbuagu made the appeal in Calabar while reacting to some media reports that petrol subsidy may gulp N2 trillion in 2021.
The don explained that subsidy was a way of controlling price to help the general populace but noted that most times, it was abused.
He noted that the government must not hesitate to removed such an item whenever it was abused.
“Whenever subsidies are abused, they cease to be a control measure by the government to help the masses and become an advantage to few people, to that extent, I say it should be removed.
“I know the initial impact would be suffering but everyone will finally wake up to the realisation that it is our responsibility to change things for stability.
“However, subsidies are not just removed, the government must, first of all, put some things in place before it gradually removes subsidy.
“Immediately after the civil war in Nigeria, we had the essential commodity policy which worked, as government brought commodities that were not available and the people could go and buy them at government controlled prices.
“But we cannot just continue like that because of its dangers in the market and the fact that it is prone to abuse.
“If, for instance, you allow a contractor to supply sugar or rice alone and the government subsidises these commodities, there is every tendency of abuse as we see in our electricity and petroleum products.
“There are areas in this nation that fuel is still sold for over N200 per litre even though government is seriously subsidising petroleum products.
“We also have the same problem in the power sector as many Nigerians are made to pay very exorbitant estimated bills,” he said.
The don added that if the nation must achieve in other sectors, what it had achieved in the telecommunication sector, it must allow players to come into these sectors and properly regulate them.
He said the healthy competition would not only reduce price as the market forces would be at play but also encourage massive productivity.