FG Spends $600m on Fuel Importation Monthly, Reveals Minister Edun
In a recent disclosure, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, announced that Nigeria is currently shouldering a $600 million monthly expenditure on fuel importation. This figure was shared during his appearance on AIT’s Moneyline programme, highlighting the significant financial burden facing the country due to its energy needs.
Edun pinpointed the inefficiencies surrounding fuel importation, emphasizing that the benefits of Nigeria’s fuel consumption extend beyond its borders, reaching countries in Central Africa. This widespread consumption pattern led to the decisive action by President Bola Tinubu to eliminate fuel subsidies. The subsidies, according to Edun, were ineffectively distributed, with the poorest 40% of the population receiving a meager 4% of the subsidy’s value, rendering them virtually unbenefited.
An aftereffect of removing the fuel subsidy, as reported by the National Bureau of Statistics (NBS), saw the country’s petrol import bill decline to an average of one billion litres monthly. This measure was part of an attempt to better manage the nation’s expenditures on petroleum products. “The fuel subsidy was lifted by Mr President on May 29, 2023, marking a significant turn towards addressing the indiscriminate benefits enjoyed by neighboring countries at Nigeria’s expense,” Edun remarked.
The underlying issue, as Edun noted, is not just the colossal sum directed towards fuel imports, but the obscured consumption metrics within Nigeria that exacerbate the difficulty in managing these costs effectively. The removal of the fuel subsidy was thus framed as a necessary step towards rectifying the imbalance and directing resources more efficiently within the country.
In discussing the financial management strategies of the Federal Government, Edun shed light on the recent N570 billion fund allocation to state governments last December, aimed at reinforcing COVID-19 financial protocols and enhancing state capacities for food production. This initiative underscores the government’s priority towards ensuring food security and bolstering local economies.
The minister also touched upon the adjustment of the maximum borrowing percentage in the Ways and Means, clarifying that this does not signify an increased reliance on Central Bank of Nigeria financing. Instead, it aligns with the overarching goals of reducing inflation, stabilizing exchange rates, and lowering interest rates to foster a more inviting environment for investments and job creation.
Highlighting the administration’s dedication to the welfare of Nigerians, Edun reassured that efforts are being made to ensure the availability and affordability of food. “There is a concerted effort to ensure that we have homegrown food available,” he stated, acknowledging the temporary allowance for food importation as a measure to bridge the gap between supply and demand without undermining local farmers.
Through a series of strategic interventions, the current administration aims to bolster the nation’s economy, emphasizing the critical role of sustainable fuel consumption strategies, efficient financial management, and food security in driving Nigeria’s progress.
