The Federal Government of Nigeria has announced the extension of the subsidies removal policy to professional bodies and councils, starting from the 2024 budget.
The decision, outlined in a letter dated June 26, 2023, and signed by Ben Akabueze, signifies the government’s intention to discontinue budgetary funding for professional institutions, Investors King reports.
The letter highlighted that the Presidential Committee on Salaries (PCS), during its 13th meeting, reached a consensus to cease budgetary allocations to professional bodies and councils effective December 31, 2026.
Consequently, the letter served as official notice that the government would no longer provide financial provisions to these organizations, designating them as self-funded entities.
The communication further emphasized that starting from December 31, 2026, the respective institutions would assume full responsibility for their personnel, overhead, and capital expenditures. This shift in financial responsibility signals a significant change in the relationship between professional bodies and the government.
The decision to extend the subsidies removal policy to professional bodies comes shortly after President Bola Ahmed Tinubu eliminated subsidies on petroleum products and depegged the Nigerian Naira, allowing market forces to determine the nation’s exchange rate.
The International Monetary Fund (IMF) and other multilateral financial institutions have long criticized Nigeria’s heavy subsidies burden, attributing it to various challenges faced by the nation despite ongoing efforts to address them.
According to the IMF, the removal of subsidies alone could result in Nigeria saving a substantial amount, estimated at up to N3.9 trillion in 2023.
The IMF further explained that redirecting such significant funds could be channeled into critical areas such as infrastructure development, healthcare, education, and more.
President Tinubu took a comprehensive approach, beginning with the removal of subsidies on education, followed by similar actions across various sectors.
His strategy, popularly known as the “willing buyer willing sellers” methodology, aimed to streamline government spending and encourage market-driven solutions.
As Nigeria moves toward the complete removal of subsidies and a greater reliance on market dynamics, professional bodies and councils must now navigate a new financial landscape. With the upcoming deadline in mind, these organizations must adapt their operational and financial strategies to ensure sustainable growth and meet their mandates effectively.
