Wale Edun, the Nigerian Minister of Finance and Coordinating Minister of the Economy, disclosed that Nigeria spends $600 million monthly on fuel importation. This substantial import bill is attributed to neighbouring countries, extending as far as Central Africa, benefiting from Nigeria’s subsidised fuel imports.
Edun made this revelation during an interview on AIT’s Moneyline programme, which was shared on the network’s YouTube channel on Wednesday.
Reason for Fuel Subsidy Removal
Explaining the rationale behind President Bola Tinubu’s decision to remove the fuel subsidy, Edun pointed out the ambiguity surrounding Nigeria’s actual fuel consumption.
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“We know we spend $600 million to import fuel every month, but the issue is that all the neighbouring countries are benefiting. So, we are buying not just for Nigeria but also for countries to the east, north, and west, nearly reaching Central Africa,” Edun stated.
Impact on Domestic Consumption and Economy
According to the National Bureau of Statistics, Nigeria’s petrol importation decreased to an average of one billion litres monthly following the subsidy removal on May 29, 2023. Edun emphasised that the poorest 40 per cent of Nigerians were only receiving 4 per cent of the subsidy benefits, rendering the subsidy ineffective for the majority of the population.
“The subsidy was primarily benefiting a few, and the significant portion of our imported fuel was being used by neighbouring countries. We need to decide as Nigerians how long we want to sustain this practice, which is crucial for our economic stability,” Edun added.
Government’s Focus on Welfare and Food Security
Edun reiterated that the government prioritises the welfare of its citizens, especially the vulnerable. Ensuring food availability and affordability is a key focus area.
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He also addressed the recent release of N570 billion to state governments, clarifying that this was a reimbursement initiated in December of the previous year under the COVID-19 financing protocol.
“The states have received more funds, and Mr President has tasked them with ensuring food production within their regions,” Edun explained.
Clarification on Borrowing and Economic Stability
Regarding the decision to raise the maximum borrowing percentage in the Ways and Means provision from 5 per cent to 10 per cent, Edun clarified that this does not indicate a reliance on Central Bank of Nigeria (CBN) financing.
“We have not approached the CBN for loans to pay debts or salaries. Instead, we have used market instruments to manage our debts, maintaining a robust economy,” he said.
The approval by the National Assembly for this increase is described as a fail-safe measure to provide flexibility in case of revenue-expenditure timing mismatches.
“The aim is to adhere strictly to the law while ensuring financial stability,” Edun noted.
Measures to Control Inflation and Stabilise the Economy
The government is also taking steps to control inflation, stabilise exchange rates, and lower interest rates to create a conducive environment for investment and job creation. Edun highlighted that while efforts are made to distribute reserves and open a window for importation, local supplies must be exhausted first.
“Auditors will ensure that local markets and millers’ stocks are fully utilised before permitting imports,” he assured.
These interventions, according to Edun, are part of the administration’s broader strategy to foster economic growth and improve living standards for all Nigerians.
