Now that subsidy is gone, what is the plan?

Subsidies play a significant role in shaping economic policies in many countries, including Nigeria.

Subsidies are government incentives that aim to support specific industries or sectors by reducing the cost of goods or services.

However, the effect of subsidy removal on the Nigerian economy has been a subject of much debate and analysis.

Subsidies have long been used by the Nigerian government to support various sectors primarily the energy sector.

These subsidies are intended to stimulate economic growth, encourage investment, and alleviate the burden of high costs on consumers.

For instance, fuel subsidies have been implemented to ensure affordable prices for petroleum products, as Nigeria heavily relies on oil for its revenue.

Due to several imports, the subsidy on petrol has to be removed. For one the federal government cannot afford the subsidy payment anymore.

By removing subsidies, the government can redirect its spending towards more productive sectors.

The funds that were previously allocated to subsidies can be channelled into infrastructure development, healthcare, education, and other critical areas that can foster long-term economic growth.

The removal of subsidy is good for the industry; growth will be engendered as several players can now play competitively, efficiency will become the cornerstone to build on and this will aid product delivery to the end users.

The removal of subsidies can promote economic efficiency by allowing market forces to determine prices and allocate resources more effectively.

When subsidies are in place, they can distort market signals, leading to inefficiencies and suboptimal resource allocation. By removing subsidies, the government can create an environment that encourages competition and innovation, driving economic growth in the long run.

That is just one way to look at it, according to economic analysts, the removal of subsidies will trigger a temporary spike in inflation as the prices of essential commodities rise. However, over time, the market will adjust to the new price equilibrium, and inflationary pressures may stabilize.

One of the primary concerns surrounding subsidy removal is its impact on low-income households. These households often heavily rely on subsidized goods for their daily needs.

When subsidies are removed, the cost of living may increase, posing challenges for vulnerable segments of society.

To counter this, the government is prepared to review several areas of the fiscal economy. The government is prepared to review the minimum wage and provide palliatives for the most vulnerable.

More importantly, the money recouped from subsidy will be reallocated into infrastructure development and social programs, fostering sustainable economic growth.

It might be hard at first, but we will cross this rubicon and the country will be better for it.

Frequently Asked Questions (FAQs)

1. When was fuel subsidy removed in Nigeria?

Contrary to popular opinion, the subsidy regime was ended by the assent to the Petroluem Industry Act by the then president, Muhammadu Buhari in February of 2022. However, the nation was not ready and the budgetary allocation continued into May of 2023 – the end of the Buhari administration.

2. How does subsidy removal impact inflation?

Subsidy removal can lead to short-term inflationary pressures as the prices of subsidized goods or services increase. However, over time, the market can adjust to the new price equilibrium, and inflation may stabilize.

3. Are there alternative measures to subsidy removal?

Yes, there are alternative measures that can be considered before resorting to subsidy removal. These include subsidy reforms, targeting subsidies to specific populations, improving subsidy delivery mechanisms, and implementing fiscal consolidation measures.

4. What are the potential social implications of subsidy removal?

Subsidy removal can have social implications, particularly for low-income households. The increased cost of living may pose challenges for vulnerable segments of society. However, by redirecting resources, the government can implement targeted social welfare programs to mitigate the adverse effects.

6. What are the long-term benefits of subsidy removal?

The long-term benefits of subsidy removal include improved fiscal sustainability, increased government revenue, reduced corruption opportunities, economic efficiency, and the reallocation of resources to critical sectors.

Nigeria’s leading real estate firm, Adron Homes and Properties Limited has unveiled its annual promo and discount sales in celebration of the Ileya season tagged: 2023 ‘Sallah Repete’.

In the 2023 ‘Sallah Repete’, customers will be given discounted prices for land purchased alongside mouthwatering prices and a flexible payment plan.

According to the company, it launched the promo to encourage all and sundry, and not just Islamic faithful, to key into the festive season to become land and homeowners.

In the promo, customers will be given 30%, 40% and 50% discounts on all land purchased, with the balance spread for 30 months for premium estates littered across the country, including Lagos, Ogun, Osun, Oyo, Ekiti, Niger, Nasarawa and Abuja.

The company, in a statement signed by its Director-General of Sales and Marketing, Olubunmi Akinfe, said the annual Ileya Sallah Repete promo is a yearly sales promo carried out to open more windows for existing and prospective customers who are willing to become homeowners at significantly discounted prices with flexible payment plans and also give them a massive reward with jaw-dropping prizes.

“For the Sallah Repete Promo, we have lots of prizes in stock for our customers who purchase lands in any of our estates across the country”, Akinfe said.

Continuing, the DG sales and marketing added: “We will be giving out prizes like rams, goats, rechargeable fans, home theatres, water dispensers, electric kettles, refrigerators, food processors, vacuum cleaners, bags of rice, cooking oil, gas burners, mini food packs, washing machines, deep freezers, smart TVs, generators and a whole lots of prizes.

“Customers will be gifted these prizes in the spirit of Ileya celebration for the 2023 Sallah Repete across our offices”, Akinfe said.

The promo, according to Adron Homes and Properties, will run between now and August 2023, and is open to both its existing and new customers, as they smile home with various gift items from the real estate company.

Akinfe further added that the purpose of the gift sharing is to appreciate the support and commitment of existing and prospective customers and urge them to do more and tell their family and friends to also key into the ongoing promo, adding that “at Adron Homes, the more, the merrier.”

She added: “Customers have started picking up their gifts from our offices. Scores of people are already subscribing to our plans. We are extending it beyond the Sallah period to allow as many who want to be homeowners to key into this opportunity by purchasing land at our estates at the most affordable prices with seamless payment plans”.

It will be recalled that Adron Homes and Properties, which recently clocked 11 years in the real estate business, has over the years bridged the gap in affordable housing for Nigerians by developing state-of-the-art estates with modern facilities like; concrete drainage and roads, recreation parks, massive gatehouse, security, street light, Grocery stores and a host of other interesting developments, making the estates habitable and comfortable for residents.

At the 11th anniversary celebration, the company reiterated its commitment to continually change the status of more low-income earners across the country from tenants to landlords by opening more estates across the country and sticking to its mission statement which is creating affordable housing.

Globus Bank Limited has filed an application before a Lagos high court, asking the court to order the reversal of the funds from the accounts of the fraudulent beneficiaries, who are based in eight commercial banks, in an effort to recover a total of N1,755,376,156.34 fraudulently transferred electronically from its vault.

According to an affidavit sworn to by the legal officer of Globus bank Limited, Kosisochukwu Ngene and filed before the court by a Legal practitioner, Barrister V.K.Banjo, the deponent made oath and stated as follows:

• That Globus bank is a commercial bank with the registered office at No 6 Adeyemo Alakija street, Victoria Island, Lagos and licensed under the laws of Nigeria to carry out banking business in Nigeria.
• That between Monday 6th and Saturday 11th of June 2022, there was a system glitch in the Globus bank’s Unstructured Supplementary Service Data (USSD) application, which led to the processing of several fraudulent and unauthorized electronic transfer in the sum of N1,755,376,156.34 (One Billion, Seven Hundred and Fifty-Five Million, Three Hundred and Seventy-Six Thousand, One Hundred Fifty-Six Naira thirty four kobo.

It was gathered that seven hundred and nine (709) Globus bank customers’ who were Involved in the fraudulent transfer to the various accounts domiciled with the 8 commercial banks are contained in the Excel sheet filed before the court.

Immediately the Globus bank discovered the glitch, the bank instantaneously notified all the banks involved and requested that the beneficiary accounts be restricted in line with Central bank of Nigeria regulation to avoid dissipation of the funds fraudulently transferred into the accounts domiciled with the banks.

Subsequently, Globus bank immediately approached the Magistrate Court, in the Yaba Magisterial District and obtained an order directing the banks to freeze and reverse the amount fraudulently transferred into various accounts domiciled in the banks.

“That in response to the order served on the respondents some of the respondents were able to salvage certain sum wherein the total sum of N817,998,969.85 were returned to the bank while the total sum of N962,019,843.35 is still outstanding and yet to be returned to the bank by the respondents banks.

“The Excel sheet which contains the names of the respondents the total amount fraudulently transfered from Globus bank,the total amount salvaged and returned to the Globus and the total amount outstanding is analyze is filed before the court.

“That the parties in this suit are also financial institutions; therefore the order of this honourable court is also required, to enable the Respondents reverse the salvaged fund back to the Applicant.
Although, the Applicant obtained an order of restriction on the accounts domiciled with the Respondent banks from the Magistrate court, as exhibited before the court, Globus bank Limited still requires the order of the high court to enable the Respondents reverse and remit the salvaged funds to the bank”, the suit reads.

Meanwhile, some of the Respondent banks were ready and willing to reverse and remit the salvaged sum to the Globus bank when the order of the court was served on them, and had further requested an order of the high court, to enable them reverse and remit the salvaged funds.

The court noted that “the requirement for formal proceedings has resulted in the apparent delay between the date of the transaction and the filing of the instant application.

“Therefore it would be unjust and inequitable for the Respondents to refuse to reverse and recall the transfer of the sum fraudulently transferred in the unauthorized transaction, as that would amount to unjust enrichment on the part of the Respondent banks’ customers.

“The Respondents are not contesting the facts stated in this case but require Court order of the high court to compel the Respondents to reverse the amounts to the Applicant. It will be in the interest of justice for the reliefs sought in the Originating Summons to be granted as prayed, as the Respondent would not be prejudiced.

“That the Rules of this Honourable court empower this Court to hear an urgent matter such as this”.

It was gathered that Globus bank Limited is willing to give an undertaking as to damages if the order ought not to have been made. Consequently, Globus bank Limited is seeking the following reliefs from the court.

• An Order of the Court directing all the eight banks to immediately reverse and remit to, Globus bank Limited the total sum of N962,019,843.35 (Nine hundred and sixty two million, nineteen thousand , eight hundred and forty three naira, thirty five kobo), being the outstanding sum yet to be salvaged from the fraudulent transfer into several accounts domiciled with the eight Respondents from the Globus bank 709 customers’ accounts, less depleted sum.
• An order directing the eight commercial banks to release all account information in respect of the destination accounts and the beneficiaries of the transfer funds and for such further order(s) as the court may deem fit to make in the circumstances of this case.