Nigeria currently spends $600 million monthly on fuel imports, largely due to neighboring countries benefiting from the country’s fuel supplies, Finance Minister Wale Edun disclosed during an interview on AIT’s Moneyline programme. This high import bill is a key reason behind President Bola Tinubu’s decision to remove the fuel subsidy, as the exact internal consumption of fuel remains unknown.
The removal of the fuel subsidy, effective May 29, 2023, aimed to address the imbalance where only 4% of the poorest 40% benefited from the subsidy. Edun highlighted that Nigeria's fuel imports inadvertently support countries in Central Africa, the east, north, and west, raising critical questions about the sustainability of this practice. He emphasized the need for decisive action to tackle this issue, which hampers economic growth.
Edun also discussed the government’s commitment to ensuring the welfare of the people, particularly the vulnerable, by focusing on food availability and affordability. He clarified that the N570 billion fund release to state governments, implemented last December, aimed to boost food production. Additionally, he addressed the recent decision to raise the maximum borrowing percentage in the Ways and Means from 5% to 10%, stating it provides flexibility without implying reliance on Central Bank financing.
The Finance Minister reassured that local farmers would not be undermined by importation measures, which would only be permitted after exhausting local supplies. These interventions aim to reduce inflation, stabilize exchange rates, and lower interest rates, fostering a conducive environment for investment and job creation.
