The Federal Government on Thursday said that a whopping sum of N900bn will be spent next year in subsidizing the Price of Premium Motor Spirit.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, said this during the public consultation of the Medium Term Expenditure Framework/Fiscal Strategy Paper for 2022-2024
The Minister described the amount spent on subsiding petrol as a drain on the economy, adding that such would have been spent on more productive sectors of the economy such as health, education and infrastructure.
Ahmed said, “This is costing us big time.
We are spending over N150bn on subsidy, that means NNPC has to use that amount of money to pay for PMS and distributing it. That is money that the federation account can share.
“This is money that could have been available for education, health and infrastructure. reduce our borrowing, increase the amounts that states and local governments are collecting.
“We are being penny wise pound foolish to think that by giving this subsidy, that citizens are benefitting. But by the end of the day, the citizens are actually the ones that are carrying the brunt of the wealthy.”
The Finance Minister lamented that while subsidy was supposed to be enjoyed by the poor, those that are actually benefiting from it are the rich people in the society.
She added, “Some (the rich) have two, three, four cars and they are the ones that we are subsidizing.
It is not helping the farmer who needs a bus from his farm to the market. But we need to get rid of subsidy completely, although it is not a popular view with labour.
“Right now, , we are subsidizing consumption in Nigeria, we sell at N165 per liter when our neighbors are selling at N500 per litre. It is only the marketers that are benefiting by taking this product from from Nigeria and selling it across borders. The common man is not benefiting.
“The transition is not an easy one if we have to remove the subsidy. What are the alternatives? What can we provide for Citizens? So we are projecting we’ll be paying at least N900bn subsidy for next year.
“Imagine what we could have done with that amount. How many schools you can build, how many health center.
It is not wise, it is not wise because we are hurting our economy.”
An analysis of the 2022 Federal Government spending showed that the projected subsidy budget of N900bn is higher than the N292.7bn for sinking fund, N750.03bn personnel cost for Government Owned Enterprises, and N335bn overheads cost,