The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has revealed that Nigeria currently spends $600 million monthly on fuel importation.
He attributed the high import bill to neighboring countries, including those in Central Africa, benefiting from Nigeria’s fuel imports.
During an interview on AIT’s Moneyline programme, Edun explained that this situation was a key reason behind President Bola Tinubu’s decision to remove the fuel subsidy.
“The fuel subsidy was removed May 29, 2023, by Mr. President, and at that time, the poorest of 40 percent was only getting four percent of the value, and basically, they were not benefiting at all,” Edun said.
“So it was going to be just a few.”
Edun emphasized the lack of accurate data on domestic fuel consumption.
“Another point that I think is important is that nobody knows the consumption in Nigeria of petroleum. We know we spend $600 million to import fuel every month but the issue here is that all the neighboring countries are benefiting,” he stated.
“So we are buying not just for Nigeria, we are buying for countries to the east, almost as far as Central Africa. We are buying for countries to the North and we are buying for countries to the West.”
He highlighted the need for Nigeria to address this issue decisively to promote economic growth.
“We have to ask ourselves as Nigerians, how long do we want to do that for, and that is the key issue regarding the issue of petroleum pricing,” Edun noted.
Edun also addressed the government’s commitment to the welfare of its citizens, particularly the vulnerable.
He clarified that the N570 billion fund release to state governments was implemented in December last year under the COVID financing protocol.
“The states have received more money. Mr. President has charged to ensure food production in the states,” Edun said.
Regarding the recent decision to raise the maximum borrowing percentage in the Ways and Means from five to 10 percent, Edun clarified that this does not imply reliance on Central Bank of Nigeria financing.
“We have not gone to the central bank to say, please lend the government money to pay its debt, to pay its salaries. That’s Ways and Means. We have not gone. In fact, we have used market instruments to pay down what we owed, and that is a very, very germane aspect of having a strong economy,” he explained.
Edun described the approval by the National Assembly as a fail-safe measure.
“Sometimes it just gives that extra flexibility so that if a payment needs to be made and there’s a mistiming, there’s a gap between the time at which the revenue will come in and the expenses needed, you can just draw down briefly,” he said.
He reiterated the administration’s commitment to reducing inflation, stabilizing exchange rates, and lowering interest rates to create a conducive environment for investment and job creation.
“There is a concerted effort to ensure that we have homegrown food available. In the short term, apart from what is being distributed from reserves, there is a window that has been opened for importation because the commitment of Mr. President is to drive down those prices now and make food available now,” Edun stated.
He assured that importation would not undermine local farmers, as it would only be permitted after exhausting local supplies.
“One of the conditions for this importation will be that everything available locally in the markets or with the millers and so forth has been taken up. We will have auditors that will check that,” Edun concluded.