The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, disclosed that Nigeria spends $600 million monthly on fuel imports.
Edun emphasized that this situation was a significant factor behind President Bola Tinubu’s decision to remove the fuel subsidy.
Edun attributed the high import costs to fuel consumption in neighboring countries, reaching as far as Central Africa, which benefits from Nigeria’s imports.
The country lacks accurate data on its internal fuel consumption, exacerbating the issue. Following the subsidy removal on May 29 last year, the National Bureau of Statistics reported a reduction in petrol imports to an average of one billion liters monthly.
Additionally, the exact petroleum consumption within Nigeria remains unknown, complicating the issue. He stressed that the country needs to question how long it can sustain purchasing fuel not only for itself but also for neighboring countries.
He pointed out that the subsidy primarily benefited a small segment of the population, with the poorest 40% receiving only 4% of its value.
Edun highlighted the importance of addressing this problem to foster economic growth. He clarified that the N570 billion fund released to state governments last December was part of a COVID financing protocol reimbursement, emphasizing the need to boost food production in states.
He stated the great effort to increase homegrown food supply and, in the short term, allow controlled importation to drive down prices. This measure aims to reduce inflation, stabilize exchange rates, and lower interest rates, fostering a conducive environment for investment and job creation.
Regarding the recent increase in the maximum borrowing percentage from the Ways and Means from 5% to 10%, Edun explained that it does not indicate a reliance on Central Bank of Nigeria financing. Instead, the government has used market instruments to manage its debts, ensuring economic stability. He described this approval by the National Assembly as a precautionary measure to provide flexibility for temporary financial gaps.
The minister reiterated that the administration’s primary concern is the welfare of Nigerians, particularly through ensuring food availability and affordability.
