The Federal Government has announced subsidy removal mechanisms revealing that Nigeria spent over thirteen trillion naira in subsidizing Premium Motor Spirit (PMS) between 2005 and 2021.
It planned a comprehensive guide for the incoming administration of President-elect, Bola Tinubu on how to manage the removal of PMS, otherwise called petrol.
FG maintained that the outgoing president, Muhammadu Buhari’s regime has done excellently well in the management of fuel subsidies.
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Speaking at the unveiling of the 2022-2026 Strategic Plan of the Nigeria Extractive Industries Transparency Initiative, in Abuja, the Secretary to the Government of the Federation, Boss Mustapha, stated that the Federal Government had been following the debates around subsidy removal by citizens.
He said some of the debates include the need to fix Nigeria’s refineries and the creation of visible safety net programmes to reduce the impact on the poor and vulnerable in the society, especially workers.
The government said it was considering implementing measures to repair and improve the refineries, ultimately leading to increased production of domestic fuel.
Another point of discussion was the creation of safety net programs to aid the poor and vulnerable members of society, particularly workers.
Mustapha said:
“There is also the strong argument on adequate mechanisms to be put in place to ensure that the revenues that will be accruing from the subsidy removal are prudently managed and channeled to the development of key infrastructure and other areas of national development.
“Let me use this opportunity to reassure Nigerians that the Federal Government has followed these conversations with keen interest having borne the burden of fuel subsidy over these years.
“While we remain open to the ongoing debate, a comprehensive position to guide the incoming administration on when and how to make this decision is being developed by the Presidential Transition Council which I currently head.”
The SGF represented by Maurice Mbaeri, a Permanent Secretary from the Office of the Secretary to the Government of the Federation, expressed confidence in the incoming administration’s ability to make an informed decision in the public interest.
He said:
“However, I must state that the Buhari administration has done excellently well in managing the subsidy burden in-spite of the complex challenges it has posed to the economy over these years, putting at the forefront of its considerations, the welfare and needs of the average Nigerian.”
Mustapha said he had carefully studied the NEITI policy advisory on fuel subsidy that was forwarded to his office and commended the agency for the in-depth research and outline of options to assist the government in making a decision on the subsidy removal debate.
He said:
“From that policy advisory, over N13tn is documented to have been expended on the payment of subsidy between 2005 – 2021. The figure in relative terms is equivalent to Nigeria’s entire budget for health, education, agriculture, and defence in the last five years, and almost the capital expenditure for 10 years between 2011 and 2020.
“I guess that this could be more if we compute in financial terms other economic and opportunity costs to the nation. These include the slashing of allocations for the health, education, and technology infrastructure sectors; deterioration of the downstream sector with the declining performance of Nigeria’s refineries, a discentivised private sector investment in the down and mid-stream petroleum sector.
“It also include the low employment generation since the refining process is done outside the shores of Nigeria and inefficient supply arrangements which often leads to scarcity and its attendant queues, etc.”
NEITI’s 2022-2026 Strategic Plan aimed to broaden the agency’s reach by extending its operations to sub-national levels, the GSF explained.
The expansion would enable NEITI to address emerging issues in Extractive Industries Transparency Initiative (EITI), such as contract and ownership transparency, gender and environmental reporting, and energy transition.
According to Mustapha, NEITI would also strengthen its policy engagement in the oil, gas, and mining sectors to enhance the agency’s effectiveness in addressing EITI’s emerging issues.
He said:
“At this point, I wish to call on all stakeholders to work with NEITI to ensure full implementation of the strategic plan and deliver on all its outcomes for the benefit of our country and the citizens.”
On his part, the Executive Secretary, NEITI, Ogbonnaya Orji, said the plan was set out to achieve three broad strategic objectives for the agency.
Orji said:
“It is to sustain extractive sector reporting and relevance by focusing on national and international priorities; strengthen extractive sector governance and reforms through policy research and strategic stakeholder engagement.
“Thirdly, it is to achieve operational excellence in implementing the agency’s mandate through professionalism, innovation, use of technology, and resource management.”
He believed that NEITI would give more attention to the solid minerals sector, stressing that revenues from that industry had not been encouraging over the years.
The new government, to be headed by Tinubu was set to be inaugurated on May 29, 2023.
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