Wale Edun, minister of finance and coordinating minister of the economy, says Nigeria currently spends $600 million on petrol importation monthly.
Edun spoke on Tuesday during an interview on AIT’s Moneyline programme.
The minister, however, reiterated that there is no petrol subsidy in the 2024 budget.
“The fuel subsidy was removed May 29, 2023, by Mr President, and at that time, the poorest of 40 percent was only getting four percent of the value, and basically, they were not benefitting at all. So it was going to be just a few,” he said.
“Another point that I think is important is that nobody knows the consumption in Nigeria of petroleum. We know we spend $600 million every month on importation but the issue here is that all the neighbouring countries are benefitting.
“So we are buying not for just for Nigeria, we are buying for countries to the east, almost as far as Central Africa, north and west.
“And so we have to ask ourselves as Nigerians, how long do we want to do that for and that is the key issue regarding the issue of petroleum pricing.”
Edun said the nation must take a decisive step to tackle the problem as it impedes economic growth.
‘IMPORT DUTIES SUSPENSION WILL NOT UNDERMINE LOCAL FARMERS’
While speaking on the welfare of Nigerians, Edun said the current administration’s key priority is to ensure food availability and affordability, hence the recent suspension of tax and duties on the importation of food commodities.
He assured that the measure will not undermine local farmers, as importation will only be permitted after exhausting local supplies.
“There is a concerted effort to ensure that we have homegrown food available. In the short term, apart from what is being distributed from reserves, there is a window that has been opened for importation because the commitment of Mr. President is to drive down those prices now and make food available now,” he said.
“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.”
Edun said these interventions seek to reduce inflation, stabilise exchange rates, and lower interest rates, thereby creating a conducive environment for investment and job creation.
“With the kind of food production programme we have, inflation will come down as prices come down. When inflation comes down, exchange rate will stabilise. Interest rates will come down and the economy will have a chance,” he said.
“People will have a chance at reasonable rates to invest in various sectors of the economy, increase productivity, grow the economy and create jobs which is the key to reducing poverty.”
On the issue of the N570 billion recently released to state governments, Edun said it was a reimbursement under the COVID financing protocol.
“This actually refers to a reimbursement that they received from December last year onwards and it was a reimbursement I think under the Covid financing protocol,” he said.
“But the point is that the states have received more money. They have received more money. We have to do our research.”
‘WINDFALL TAX WILL REDISTRIBUTE UNEARNED INCOME’
Edun said the introduction of the 70 percent windfall tax in the banking industry will redistribute unearned income.
The minister said the windfall tax was not peculiar to Nigeria alone, adding that it is “done everywhere else in the world where you have, especially the energy sector as well as banking”.
“Where you have unearned income, where you have a section of the society or an industry or a set of companies that earn money through no dint of hard work of their own, the society deserves a chance to share some of that and it’s just a redistribution of that,” he said.
“So I think that takes care of the issue of the windfall levy.”
Speaking on the recent rise in the maximum borrowing percentage in the Ways and Means advances from 5 percent to 10 percent, Edun said the move does not imply that the federal government will rely on the Central Bank of Nigeria (CBN) financing.
Edun described the approval by the national assembly as a “fail-safe” measure.
He said the government had rather 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,” he said.
“We have not gone. In fact, we have used market instruments to pay down what we owed, and that is a very, very germane aspect of having a strong economy.
“Sometimes it just gives that extra flexibility so that if a payment needs to be made and there’s a mistiming, there’s a gap between the time at which the revenue will come in and the expenses needed, you can just draw down briefly.”
The minister said the aim is to act within the law.
The Cable
