The Minister of Finance, Zainab Ahmed, yesterday revealed that the fuel subsidy was causing Nigeria’s large budget deficit and that the country needs to exit subsidy as soon as possible.
The minister disclosed this in a meeting with Voice of Nigeria (VON) as the Federal Government (FG) plans to educate Nigerians as it ends subsidy in June.
She added FG will educate Nigerians on the importance of ending the subsidy and what the saved funds would be used for.
Ahmed noted that the removal of subsidy which would be formally announced by President Muhammadu Buhari before he hands over the poor.
She told VON, “Your agency is a very important one and I hope we continue to partner because educating the Nigerian populace is important.
“We have a big task ahead of us in the ministry in partnership with the Ministry of Petroleum Resources. We committed that we will exit the fuel subsidy by June of this year.
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“We cannot afford fuel subsidy anymore and we need your agency and other media organisations to work with us. This is to educate the citizens that fuel subsidy is causing us so much deficit and we need to exit it as soon as possible.”
The Minister added that besides subsidy removal, the present administration would be remembered for its fight against corruption and also infrastructure development.
“Mr President’s anti-corruption fight is working not only on assets recovery as funds are also being recovered and we are using these funds to invest in infrastructure.
“We just got approval from the president to invest about N144bn in the Lagos-Ibadan Express Way, Abuja-Kaduna-Kano Road as well as the Second Niger Bridge. These are projects the president is trying to compete for commission before the end of his tenure,” she noted.
The minister mentioned that the Economic and Financial Crimes Commission’s (EFCC) Chairman increased the cases it has won in court, adding that it went from 250 cases when the administration took over power to about 4, 000 successful cases.
Recall that Nairametrics reported in January that the FG said that the N11.34 trillion deficit in the 2023 budget would be financed through domestic and foreign sources, including multi-lateral loan drawdowns.
Zainab during the presentation of the N21.8 trillion 2023 budget said at N6.31 trillion, debt service is 29 per cent of government expenditure.
She said: “This is 71 per cent higher than the estimate for 2022, including interest repayment of N1.2 trillion for CBN overdraft called ways and means loans.
“You will see that statutory transfer is N967 billion, and debt service N6.3 trillion, higher than N3.685 trillion projected in the 2022 budget
The minister revealed that the budget deficit is to be financed mainly by borrowings, she said: The overall budget deficit is N11.34 trillion for 2023 and it would be financed through domestic sources of N7.04 trillion, foreign sources of N1.76 trillion and multi-lateral loan drawdowns of N1.77 billion and privatisation proceed N208.18 billion.
Meanwhile, the Federal Government said it is yet to harmonise efforts with states to set up palliative measures ahead of the June 2023 deadline for the discontinuation of petroleum subsidies.
Minister of State for Budget and National Planning, Clem Agba, disclosed while briefing State House correspondents at the end of the weekly Federal Executive Council, FEC, meeting Presided over by President Muhammadu Buhari at the Council Chamber, Presidential Villa in Abuja.
The Minister said a committee led by the Vice President, Prof Yemi Osinbajo, and the National Economic Council comprising State Governors have been working to resolve the issue for over 12 months now, although he said the committee is yet to harmonise within the period.
The Committee was saddled with the responsibility of finding out palliatives that will help to cushion the effect of the subsidy removal.
Asked about the reasons for the delays, Agba explained that the situation requires time as it has far-reaching consequences for the nation, adding that they want to ensure that everyone is carried along.
Agba also added that the Ministry of Petroleum Resources and other relevant agencies have also been working on the issue.
But he quickly added that “the Minister of State, Petroleum Resources will be in a position to provide more updates.”
