BY VICTORIA ONU, ABUJA
The Federal Government is planning to replace fuel subsidy with a N2.4trn annual transportation grant to about 40 million poorest Nigerians.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, said on Tuesday that this will be implemented by 2022.
She disclosed this at the launch of the World Bank Nigeria Development Update (NDU).
According to the minister, the subsidy will be replaced with a N5000-a-month transportation grant to the poorest Nigerians.
Minister of Humanitarian Affairs, Disaster Management and Social Development, Sadiya Umar Farouq, had in February said 26.8 million Nigerians are extremely poor, a number that experts believe is on the rise.
But Ahmed said the grant will go to about 20 to 40 million Nigerians who make up the poorest population of the country.
In her presentation, she said the final number of beneficiaries will depend on the resources available after the removal of the fuel subsidy.
By implication, Nigeria will spend N200bn monthly if 40 million beneficiaries are targeted.
In a year, Africa’s most populous nation will spend N2.4trn on transportation grants to its poorest population.
Ahmed, had during the public consultation of the Medium-Term Expenditure Framework/Fiscal Strategy Paper for 2022-2024 described the amount spent on subsiding petrol as a drain on the economy.
She said that a whopping sum of N900bn will be spent next year in subsidizing the price of Premium Motor Spirit, adding that such would have been spent on more productive sectors of the economy such as health, education and infrastructure.
Ahmed had said, “This (subsidy) is costing us big time. We are spending over N150bn on subsidy, that means NNPC has to use that amount of money to pay for PMS and distributing it. That is money that the federation account can share.
“This is money that could have been available for education, health and infrastructure, reduce our borrowing, increase the amounts that states and local governments are collecting.
“We are being penny wise pound foolish to think that by giving this subsidy, that citizens are benefitting. But by the end of the day, the citizens are actually the ones that are carrying the brunt of the wealthy.”
