VICTORIA ONU, ABUJA
THE Federal Government is planning to spend the sum of N900bn next year to subsidise the price of Premium Motor Spirit.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, said this during the public consultation of the Medium Term Expenditure Framework/Fiscal Strategy Paper for 2022-2024.
The Minister lamented the huge spending, noting that such would have been spent on more productive sectors of the economy.
Ahmed said, “This (fuel 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 distribute 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.”
The Finance Minister lamented that while subsidy was supposed to be enjoyed by the poor, those that were actually benefiting from it were the rich people in the society.
She added, “Some (the rich) have two, three, four cars and they are the ones that we are subsidising. It is not helping the farmer who needs a bus from his farm to the market. But we need to get rid of subsidy completely, although it is not a popular view with labour.
“Right now, we are subsidising consumption in Nigeria, we sell at N165 per liter when our neighbours are selling at N500 per litre. It is only the marketers that are benefiting by taking this product from Nigeria and selling it across borders. The common man is not benefiting.
“The transition is not an easy one if we have to remove the subsidy. What are the alternatives? What can we provide for Citizens? So we are projecting we’ll be paying at least N900bn subsidy for next year.
“Imagine what we could have done with that amount. How many schools you can build, how many health centers. It is not wise, it is not wise because we are hurting our economy.”
The International Monetary Fund had two weeks ago expressed its concerns over the resurgence of fuel subsidies, as it reiterated the importance of introducing market-based fuel pricing mechanism.
This was disclosed by the IMF team led, Jesmin Rahman, via a statement issued after a virtual meeting with the Nigerian authorities.
