The federal government has acknowledged that it continues to pay fuel subsidies, projecting an expenditure of N5.4 trillion for 2024. This admission comes despite previous assurances that the subsidy regime had ended.
In a draft report of the Accelerated Stabilization and Advancement Plan (ASAP) presented to President Bola Tinubu by Finance Minister Wale Edun, the estimated subsidy expenditure for 2024 significantly surpasses the N3.6 trillion spent in 2023. The report highlights the escalating costs, noting that in 2022, the expenditure was N2.0 trillion.
“At current rates, expenditure on fuel subsidy is projected to reach ₦5.4 trillion by the end of 2024. This compares unfavourably with ₦3.6 trillion in 2023 and ₦2.0 trillion in 2022,” the draft report states.
The ASAP initiative aims to tackle the key challenges affecting Nigeria’s reform efforts and stimulate development across various sectors of the economy. However, the growing financial burden of the fuel subsidy poses a significant challenge to these goals.
This revelation contradicts earlier statements by the Tinubu administration, which had declared an end to fuel subsidies. In December, the government dismissed claims by the World Bank that it was still subsidizing petrol, with Minister of Information and National Orientation, Mohammed Idris, asserting that the subsidy era was “gone for good.”
In a Channels TV interview, Idris emphasized, “President Tinubu made it clear from his first day in office that his government would not sustain the payment of subsidy on petrol.”
He claimed that the removal of the subsidy had led to increased revenue for the federation account.
Contrary to these assertions, former Kaduna State Governor Nasir El-Rufai had indicated in April that the federal government was spending more on the petrol subsidy than before.
The conflicting statements and the substantial projected subsidy expenditure have raised concerns about the government’s fiscal strategy and commitment to economic reforms. As the federal government grapples with these challenges, the financial burden of the subsidy remains a contentious issue, with implications for Nigeria’s economic stability and development efforts.