The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has disclosed that Nigeria spends $600 million monthly on fuel importation. This high import bill is attributed to neighboring countries, including those as far as Central Africa, benefiting from Nigeria’s fuel imports.
Edun made these statements during an interview on AIT’s Moneyline programme, available on its YouTube channel. He explained that this situation prompted President Bola Tinubu to remove the fuel subsidy, as the country does not have accurate data on internal fuel consumption.
According to the National Bureau of Statistics, Nigeria’s petrol imports decreased to an average of one billion liters monthly following the subsidy removal on May 29, last year. Edun highlighted that the poorest 40% of Nigerians received only 4% of the subsidy’s value, indicating that the subsidy primarily benefited a select few.
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“Another point that I think is important is that nobody knows the consumption in Nigeria of petroleum. We know we spend $600m to import fuel every month but the issue here is that all the neighbouring countries are benefitting,” Edun said. “So we are buying not just for Nigeria; we are buying for countries to the east, almost as far as Central Africa. We are buying for countries to the North and for countries to the West.”
Edun emphasized that Nigeria must take decisive steps to address this issue, which hinders economic growth. He stressed the government’s commitment to the welfare of the people, particularly the vulnerable, focusing on food availability and affordability.
In the interview, Edun also clarified that the N570 billion fund release to state governments was implemented in December last year as part of a COVID financing protocol reimbursement. He assured that states have received additional funds to enhance food production.
Edun addressed the recent decision to increase the maximum borrowing percentage in the Ways and Means from 5% to 10%, clarifying that this does not imply a reliance on Central Bank of Nigeria financing. Instead, the government has used market instruments to manage its debts. “We have not gone to the central bank to say, please lend the government money to pay its debt, to pay its salaries. That’s Ways and Means. We have not gone. In fact, we have used market instruments to pay down what we owed,” Edun stated.
He described the National Assembly’s approval as a fail-safe measure, providing flexibility to manage payment timing issues without compromising legal requirements.
Reiterating the administration’s commitment to the welfare of Nigerians, Edun highlighted efforts to ensure food availability. Apart from distributing reserves, a window for importation has been opened, ensuring local supplies are exhausted before importation. “So, one of the conditions for this importation will be that everything available locally in the markets or with the millers and so forth has been taken up. We will have auditors that will check that,” he explained.
These interventions aim to reduce inflation, stabilize exchange rates, and lower interest rates, creating a conducive environment for investment and job creation.
