On Wednesday, Mr. Wale Edun, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, disclosed that the country spends $600 million each month on fuel imports.
He firmly denied the allegations that the federal government had secretly sought Ways and Means advances from the Central Bank of Nigeria (CBN), asserting that such claims are incorrect.
Edun explained that the large fuel expenditure is partly due to neighboring countries, extending to Central Africa, benefiting from Nigeria’s fuel imports. This situation was a significant factor in President Bola Tinubu’s decision to remove the fuel subsidy, with the aim of reducing foreign exchange spending.
He also mentioned that Nigeria’s lack of accurate data on domestic fuel consumption makes it challenging to manage the situation effectively. Edun emphasized that resolving this issue is crucial for the country’s economic stability and growth, while highlighting that the government’s primary focus is on the well-being of its citizens, particularly those who are most vulnerable.
Edun pointed out that a major focus for the current administration is to ensure both the availability and affordability of food.
He also clarified that the N570 billion fund allocated to state governments was set up in December of the previous year.
He stated, “The President removed the fuel subsidy on May 29, 2023. At that time, the poorest 40 percent of the population received only four percent of the subsidy’s value, meaning they were essentially not benefiting from it. The subsidy was primarily benefiting a small portion of the population.”
He added, “Another crucial issue is that we do not have precise data on petroleum consumption in Nigeria. Although we spend $600 million monthly on fuel imports, neighboring countries are also benefiting from these imports. We are essentially purchasing fuel not just for Nigeria but for countries to the east, nearly reaching Central Africa, as well as those to the north and west. We need to question how long we want to continue this situation.”
Edun also spoke about the government’s efforts to tackle inflation and stabilize the economy by promoting the availability of locally produced food. He assured that this strategy would not adversely affect local farmers, as imports would be permitted only after local supplies are fully utilized.
“In the short term, in addition to what is being distributed from reserves, there will be an opportunity for importation,” he said. “The President’s goal is to reduce prices and ensure immediate food availability. One requirement for this importation is that all locally available food in markets or with millers must be sold first. We will have auditors to confirm this,” Edun explained.
He further disclosed that the government plans to offer tax incentives to companies that increase their workforce and suspend import duties on specific goods to help combat inflation. These measures will be part of the upcoming Inflation Reduction Act, which President Bola Tinubu is expected to sign soon.
