A political economist recently expressed concerns about the Nigerian National Petroleum Corporation Limited, calling it an opaque and unreliable institution. He emphasized the need for the government to address the issues within the organization to effectively tackle ongoing challenges. During an interview, the economist highlighted the impact of fuel price hikes, attributing part of the problem to the mismanagement of resources, particularly in the form of subsidies.
The economist suggested that cleaning up the NNPC could significantly reduce corruption within the subsidy system. He emphasized the importance of distinguishing between subsidies that drive production and those that promote excessive consumption. Drawing a comparison with agricultural subsidies in the US and Europe, he underscored the need to strategically allocate resources to support essential sectors.
Furthermore, the economist raised concerns about the misuse of the term “subsidy,” pointing out that a significant portion of what is labeled as subsidy may actually be linked to corruption and smuggling. He argued that addressing corruption within the system should be a priority before burdening citizens with increased prices. By tackling corruption effectively, he believed that the country could witness a significant reduction in inefficiencies and costs related to subsidies.