The federal government of Nigeria has, since May 29, 2023, saved ₦1.45 trillion from earnings that were received from the subsidy removal on Premium Motor Spirit (PMS), known as petrol, between the period of June and September, 2023. This disclosure was revealed by FAAC allocation documents received from Nigerian Governors Forum and National Bureau of Statistics’ website. An analysis revealed that the money that was remitted to the government’s Non-Oil Revenue account had the sum of ₦696.93 billion, ₦389.7 billion, ₦71 billion, and ₦289 billion in June, July, August, and September, respectively.
On May 29, 2023, President Bola Ahmed Tinubu, declared fuel subsidy removal while delivering his inaugural speech, emphasizing that subsidy is no more. Prior to subsidy removal, the Nigerian National Petroleum Company Limited (NNPC) had stated that subsidy payments cost ₦1.828 trillion between January to May 2023. This amount is 55 percent higher than what was paid within the same period in 2022. In the first four months of 2023, the government spent about ₦1.15 trillion on subsidy.
TUC President questions FG’s continuous money borrowing.
President Bola Ahmed Tinubu, on August 1, 2023, disclosed, in a nationwide broadcast, that the Nigerian Federal Government has saved ₦1 trillion between June and July, 2023, ever since subsidy removal. The President stated that this saved funds would have been embezzled by smugglers and fraudsters as they are the only ones, according to him, who benefited from the fuel subsidy. However, according to his statement, the funds will be used to organise intervention programmes that target families across the country.
Festus Osifo, Trade Union Congress (TUC) President, has cried out regarding funds that the government claimed to have saved. He questioned the government about where the saved funds, since the removal of subsidies, were kept. During a television interview, the TUC President said that the government has no reason to keep borrowing funds, since it announced that it has been able to save ₦1trn. He likewise added that part of the funds saved should be released by the federal government to Nigerians.
Minister says part of the saved funds have been sent to state gov’ts.
Osifo asserted that the President of Nigeria and Commander-in-Chief announced, of his own accord, that Nigeria has saved ₦1trn. Also, he said that the federal government had declared that it would save a huge amount of money, if fuel subsidy was removed. As a result, the government is not expected to engage in money borrowing. Therefore, the TUC President questioned the Federal Government of Nigeria on where it has kept the funds and how it has been deployed.
Also, the Minister of Information and National Orientation, Mohammed Idris, said that the federal government gained massive savings from subsidy removal. In his statement, he said that some of these saved funds have been allocated to state governments to contribute towards the amelioration of the impacts of this government’s policy on Nigerian citizens. The minister made this statement at a discussion with senior journalists on November 6, 2023, in Abuja. During the course of the parley, the minister refused to specify the amount that was saved.
State gov’ts have been given funds to cushion effects of the subsidy.
Furthermore, the minister stated that state governors have received a lot, in regards to the saved funds. He added that as a lot of money was saved, state governments have also received an allocation of the funds. This is because the Nigerian President is of the notion that state governments have closer relationships with the citizens than the federal government. Therefore, the President has been sending funds to state governors for provision of cushioning palliative to citizens.
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₦1.45 trillion saved from subsidy removal. – FG spent ₦1.15trn on subsidy payment in first four months of 2023. – Express your point of view.
Concerns about transparency and effective use of the ₦1.45 trillion saved from the fuel subsidy removal are valid. Nigerians need clear information on how these funds are being utilized to ensure public trust and address pressing issues.
It’s interesting to see the difference in the numbers between the savings from subsidy removal and the previous subsidy payments. It seems like removing the subsidy has resulted in substantial savings for the government.
From an economic perspective, redirecting the funds that were previously used for subsidy payments towards other sectors or developmental projects can have positive impacts. This can include investing in critical infrastructure, healthcare, education, and social welfare programs that benefit the entire population.
Transparency and accountability in the management of these saved funds are also vital. The government should provide clear information on how the saved funds are being utilized and ensure that they are channeled towards projects that promote economic growth, job creation, and overall development.
Ultimately, the decision to remove subsidies is a complex one, and it requires careful consideration of both the short-term and long-term impacts. It’s essential for the government to strike a balance between fiscal responsibility and the well-being of the citizens, ensuring that the saved funds are effectively utilized for the benefit of all Nigerians.
The government must find a balance between economic responsibility and public well-being in order to make sure that the money saved is used wisely. Because the subsidies were eliminated, we were able to save a significant sum of money. All this fund should be reinvested in other sector. Our economy has suffered greatly as a result of the subsidy.
₦1.45 trillion saved from subsidy removal. – FG spent ₦1.15trn on subsidy payment in first four months of 2023 It is imperative that these money be managed transparently and with responsibility. It is imperative that the government ensures the funds saved are allocated towards programs that promote economic growth, job creation, and overall development.