Finance Minister insists fuel subsidy causing deficit says Nigeria needs to “ exit as soon as possible”
Nigeria’s Finance Minister, Zainab Ahmed revealed that the fuel subsidy is causing Nigeria’s large budget deficit and that Nigeria needs to exit subsidy as soon as possible.
The Minister disclosed this in a meeting with Voice of Nigeria (VON) as the Federal Government plans to educate Nigerians as it ends subsidy in June.
She added FG will educate Nigerians on the importance of ending the subsidy and what the saved funds would be used for.
Deficit: Ahmed noted that the removal of subsidy which would be formally announced by President Muhammadu Buhari before he hands over power, she told the VON that:
- “Your agency is a very important one and I hope we continue to partner because educating the Nigerian populace is important.
- “We have a big task ahead of us in the ministry in partnership with the Ministry of Petroleum Resources.
- “We made a commitment that we will exit fuel subsidy by June of this year.”
- “We cannot afford fuel subsidy anymore and we need your agency and other media organisations to work with us.
- “This is to educate the citizens that fuel subsidy is causing us so much deficit and we need to exit it as soon as possible.”
Infrastructure: The Minister added that besides subsidy removal, the present administration would be remembered for its fight against corruption and also infrastructure development, she noted:
- “Mr president’s anti-corruption fight is working not only on assets recovery as funds are also being recovered and we are using these funds to invest in infrastructure.
- “We just got approval from the president to invest about N144 billion in the Lagos-Ibadan Express Way, Abuja-Kaduna-Kano road as well as the Second Niger Bridge.
- “These are projects the president is trying to complete to the commission before the end of his tenure.”
She also mentioned that the Economic and Financial Crimes Commission’s Chairman increased the cases it has won in court, adding that it went from 250 cases when the administration took over power to about 4,000 successful cases.
What you should know
Recall NewsTimes reported in January that the Nigerian Government said that the N11.34 trillion deficit in the 2023 budget would be financed through domestic and foreign sources, including multi-lateral-bilateral loan drawdowns.
Finance Minister, Zainab during the presentation of the N21.8 trillion 2023 budget said at N6.31 trillion, debt service is 29% of government expenditure. She said:
- “This is 71% higher than the estimate for 2022, including interest repayment of N1.2 trillion for CBN overdraft called ways and means loans.
- “You will see that statutory transfer is N967 billion, and debt service N6.3 trillion, higher than N3.685 trillion projected in 2022 budgeted”
Deficit: The Minister revealed that the budget deficit is to be financed mainly by borrowings, she said:
- “The overall budget deficit is N11.34 trillion for 2023 and it would be financed through:
- “Domestic sources: 7.04 trillion
- “Foreign sources: N1.76 trillion
- “Multi-lateral-bilateral loan drawdowns N1.77 bn and Privatisation proceed N208.18 bn”.