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Bullion

Keywords

Fuel Subsidy, Restructure, Nigeria, Inflation, Expenditure, Domestic debt, Budget

Abstract

While the short term measures to reduce recurrent expenditure are necessary conditions for fiscal sustainability, the long term imperative is to increase revenue. Thus, efforts should be made by the fiscal authorities in Nigeria to pursue the policy of balancing of expenditure with revenue improvements. The issues of the underperformance of the capital budget should be reversed before savings from cuts in recurrent expenditure can be diverted to the financing of capital expenditure. From the analysis, we say that removal of fuel subsidy would no doubt have some social and economic hardship on the people in the short run, However, if the above recommendations are put in place, the gains that are consequent upon the removal would improve the economy and the protest and threats of labor would be avoided. Consequently, the economy will be disengaged from the stigma and economic quagmire that had hampered the Nigerian economy from experiencing real economic growth/development.

Author Bio

Akinboyo, O. Lawrence is a Principal Manager of the Monetary Policy Department, Central Bank of Nigeria.

Publication Title

CBN Bullion

Issue

3 - 1

Volume

36 - 37

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