The federal government has proposed N900 billion to be spent on fuel subsidy in 2022.
The minister of finance, budget and national planning, Mrs. Zainab Ahmed, disclosed this at the public presentation of the 2022-2024 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) held yesterday in Abuja.
The minister also stated that subsidy gulps N150 billion every month.
“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,” she said.
She said if fuel subsidy was withdrawn, it would reduce borrowing and increase the allocations which states and the local governments collect monthly.
“We are being penny-wise, pound foolish to think that by giving this subsidy, citizens are benefitting. But at the end of the day, the citizens are actually the ones that are carrying the brunt of the wealthy.
“Some 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 if we get rid of subsidy completely, it will not be a popular view with labour.
“Right now, we are subsidising consumption; 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 the borders. The common man is not benefiting.
“The transition to a non-subsidy regime is not an easy one if we have to remove the subsidy. What are the alternatives? What can we provide for the citizens? So, we are projecting if we’ll be paying at least N900 billion subsidy for next year.
“What we could have done with that amount; how many schools you can build and how many health centers. It is not wise because we are hurting our economy,” she added.
Also speaking at the event, the minister of state for budget and national planning, Mr. Clement Agba, aid Nigeria was no longer dependent on oil revenue.
He called on the media to gradually change the narrative that the country is a mono-product economy.
“We can say that the Nigerian economy is diversified. It is no longer a mono-product economy. It is only mono-product to the extent that oil still contributes about 70 percent of our foreign exchange,” he said.
“When we are looking at the total contribution to budget revenue, non-oil is contributing more. When you also look at it from the perspective of GDP contribution, oil only contributes about 9.8 percent of the GDP,” he said.
