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₦1.45 trillion saved from subsidy removal

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By Mercy Kelani

FG spent ₦1.15trn on subsidy payment in first four months of 2023.

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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