The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has disclosed that Nigeria spends $600 million each month on fuel imports.
This high expenditure is partly attributed to the fact that fuel imported into Nigeria benefits neighboring countries as well, extending to regions as far as Central Africa.
Edun shared these insights during an interview on AIT’s Moneyline program, which was posted on their YouTube channel on Wednesday.
He highlighted that the removal of the fuel subsidy by President Bola Tinubu was a response to the uncertainty surrounding domestic fuel consumption.
A report from the National Bureau of Statistics indicates that monthly petrol imports averaged one billion liters after the subsidy was removed on May 29, 2023.
Edun explained that the subsidy was largely ineffective, providing minimal benefit to the poorest segments of the population, with only 4% of the value reaching them.
He emphasized that Nigeria’s fuel importation not only serves domestic needs but also supplies neighboring countries to the east, north, and west.
This situation raises questions about the sustainability of such practices and the need for a strategic approach to petroleum pricing.
Edun noted that addressing this issue is crucial for Nigeria’s economic development. The government is also focused on improving the welfare of its citizens, particularly the vulnerable, with an emphasis on food security and affordability.
Additionally, Edun clarified that the N570 billion allocated to state governments was part of a reimbursement under the COVID financing protocol, with the release implemented in December of the previous year.
He also addressed concerns about the recent increase in the maximum borrowing limit from the Ways and Means facility, stating it does not indicate a shift towards greater reliance on Central Bank of Nigeria financing.
