Economist tells govt, utilise crude surplus to reduce budget deficit

An economic and investment technocrat has advised the Federal Government to utilise crude oil surplus arising from rise in international oil market to reduce budget deficit in the economy.

Besides, the surplus should also be channeled to build infrastructure in the country.

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The Chief Consultant of B. Adedipe Associates Limited, Dr. Abiodun Adedipe, who made this assertion, said that government as a matter of priority show by example, encouragement of other sectors responsibility in payment of premium to the industry as at when due.

Speaking at a media parley sponsored by Boff Insurance Brokers Limited and B. Adedipe Associates Limited, in Lagos, Adedipe stated that the price of crude has been favourable to the economy.

Adedipe said: “the price of crude has been favourable to us. It is either you use the gain to reduce the deficit, or alternatively, you use that gain to build infrastructure, which ultimately will also increase government revenue.”
Adedipe also warned that the forthcoming election could create liquidity pressures in the economy as there will be too much money in circulation.

He said: “In pre election years, politicians spend a lot of money and that creates liquidity pressure. You have so much money circulating and that stands to put pressure on prices, so it will be expected this year that there will be inflationary pressure.”

Adedipe also decried the high volume of imports against exports in the
country.

To him, “In recent years, imports value in Nigeria had become far greater than exports. Yes we export crude oil, we export condensates, as well as associated gas. Inspite of that, we have been importing more than exporting and that has been creating employment for other countries to the detriment of our country.”

Adedipe noted that, there is nothing wrong with borrowing, adding that, “but don’t borrow to buy food, don’t borrow for consumption, if you must borrow, borrow for anything that is investment in nature. We produce crude oil but don’t refine”

While speaking on the insurance sector, Adedipe said: “For the insurance sector to grow, government need also to be responsible to its insurance obligations which talks about paying premium. There also must be need for flexibility and also ensuring that compulsory insurance is enforced because enforcement had always been an issue.

“If the government is responsible and put a lot of effort into enforcement, then what we have today as compulsory insurance we can actually create more value from. And when insurance sector is vibrant, it will galvanize businesses and individuals to take risk and that is how economies grow.

“The freedom to take risk is on the back of a vibrant insurance sector, so the conversation should be how do we make that sector vibrant and that brings us to involve more interactions between government agencies and the insurance sector, so that all the stakeholders constantly are engaging and so whatever is needed to be done to make us deepen insurance, the government will keep making that happen.”

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