Mohammed Shosanya
The Institute of Chartered Accountants of Nigeria (ICAN) has highlighted ways the recent removal of fuel subsidy can add value to the nation’s economy.
The Institute’s position was contained in an eleven-point action plan to the federal government,according to a statement signed by Professor Ahmed Kumshe, Registrar/ Chief Executive .
The body lauded the bold steps taken by the new government to address market distortions and block revenue leakages.
It advocated the need wfor action plans to reduce the burden of such economic policy decisions and limit the burden on the populace especially small businesses and vulnerable households.
According to the body,effective consultation and communication with all relevant stakeholders was critical for the introduction and implementation of any major policy, as it will facilitate buy-in, broad support and ensure ease of implementation.
It further emphasized the need for the government to introduce credible palliatives to cushion the impact on the most vulnerable population beyond the civil service.
“In this regard, the government should design and implement palliatives for low-income earners especially in cities and towns where the cost of living will rise much higher. It should introduce policies that will bring down the cost of transportation and food.
Palliatives should be implemented at both the national and sub-national levels. Care should be taken to measure the cost of palliatives to be introduced to avoid re-introducing another form of subsidy. This is where chartered accountants are needed. We do not support the borrowing of $800m for palliatives when the savings from the subsidy removal can be used for this purpose, saving the country from further debt and rising debt service costs”
There was still the need for full transparency and accountability of all activities within the oil and gas sector, that a situation where the public does not know the exact daily consumption of fuel is inexcusable,it said.
The political office holders,the body,said,should lead by example in making the necessary sacrifice to restore the country back to the path of fiscal buoyancy.
It further said the savings from the subsidy removal and subsequent accretion to the federation account should be applied in a manner that will optimize the benefits to the people in view of their sacrifices.
It maintained that,while market forces are desirable for price recovery, the government needs to ensure effective regulation and monitoring to prevent manipulations and market imperfections that may lead to exploitative pricing or price collusion.
“The gains which are expected to accrue because of market efficiency should cascade to the people rather than for the enrichment of a few. The relevant government agencies involved in the downstream petroleum industry value-chain should aim to improve their performances not to hinder the effective operation of the sector and minimize financial burdens in the form of levies which can keep prices high.
“This is a momentous time in our nation’s history. Certain difficult but necessary decisions must be made which may result in temporary pains to pave way for the gains of tomorrow and a desirable future for the next generation. This is a duty for which we must not fail.
It added:“Given the trust deficit in the government that has followed years of failed promises, corruption and fiscal laxity, the efficacy of the much-needed reforms may be constrained.The Institute of Chartered Accountants of Nigeria stands ready and offers its support to the government in the effort to move our country forward.”