Economy

Minister: Subsidy draining Nigeria’s economy

Zainab Ahmed, minister of finance, budget and national planning, disclosed this during a press briefing in Abuja on Monday.

Minister of finance, budget and national planning, Mrs Zainab Ahmed, has said petroleum under-recovery popularly known as fuel subsidy is a major drain on the nation’s economy, which ought to have been scrapped to free up money for critical sectors like health and education.

She said, “It is a major waste, a major drain on the economy. We are worried that we are spending money we should be spending on education and other areas.”

The minister stated this yesterday when she appeared on the Politics Today programme on Channels Television.

Ahmed said the lack of actual deregulation in the oil sector is denying Nigeria of the needed revenues, saying the subsidy is currently being given to people that can afford it. Stating that there is no provision for subsidy in the 2022 budget from July next year, Ahmed restated the government’s readiness to abolish the incentive from that date.

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She said ahead of the plan to remove the fuel subsidy by next July, the government is currently negotiating with the labour union while also providing social welfare packages for more Nigerians to cushion the expected effect of the removal of subsidy on their livelihoods and businesses.

The minister said the government is also working with development partners, including the World Bank to provide alternative means of transportation for Nigerians as palliatives.

On-road infrastructure, Ahmed said there is a toll policy that has been approved on roads for the government to recoup the monies spent on the provision of road projects. She however said the government is not looking at recovering the funds immediately. She said the government is aware that those plying the roads will pay tax from the economic gains from the good roads.

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On the concerns that there is ubiquitous poverty in the land despite huge borrowings by the administration, Mrs Ahmed said Nigerians have to be patient with the government. “It is sad that some people are hungry but we have to do what we have to do to ensure that everything is alright,” she said.

The minister said a political solution, not fighting on the pages of the newspapers, is the solution to resolving the lingering issue of a $418 million Paris Club refund between the federal and state governments.

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