Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, has disclosed that the nation currently incurs a monthly expenditure of $600 million on fuel imports.

He attributed the substantial import costs to the fact that neighboring countries, extending to Central Africa, are benefiting from the fuel imported by the country.

This statement was made during an interview on AIT’s Moneyline program, which was subsequently shared on its YouTube channel on Wednesday.

Edun elaborated that this scenario prompted President Bola Tinubu to eliminate the fuel subsidy, as the country lacks precise data on its internal fuel consumption.

A report from the National Bureau of Statistics indicated that following the removal of the fuel subsidy on May 29 of the previous year, the country’s petrol imports decreased to an average of one billion liters per month.

 

He said, “The fuel subsidy was removed May 29, 2023, by Mr President, and at that time, the poorest of 40 per cent was only getting four per cent of the value, and basically, they were not benefitting at all. So it was going to be just a few.

“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.

“So we are buying not for just for Nigeria, we are buying for countries to the east, almost as far as Central Africa. We are buying. We are buying for countries to the North and we are buying for countries to the 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.”

He emphasized that the country must take a definitive action to address the issue, as it hinders its economic development.

Edun stated that the government places significant importance on the well-being of its citizens, especially those who are most vulnerable.

A primary area of concern is to guarantee the availability and affordability of food.

In addition, during the interview, the finance minister specified that the release of the N570 billion fund to state governments was executed in December of the previous year.

He said, “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 but the point is that the states have received more money. They have received more money. Mr President has charged to ensure food production in the states.”

Edun clarified that the recent decision to increase the maximum borrowing percentage in the Ways and Means from five to ten percent does not indicate a reliance on Central Bank of Nigeria financing by the Federal Government.

He emphasized that the government has consistently utilized market instruments to effectively manage its debts.

The minister said, “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, and that is a very, very germane aspect of having a strong economy.

“It was raised to 10 per cent, but that doesn’t mean it will be used. It’s there as a fail-safe and just gives that extra flexibility so that if a payment needs to be made and there is a mistiming or gap in when revenue would come in and expenses, we can just draw it down briefly.”

He characterized the endorsement by the National Assembly as a precautionary measure. The minister further stated, “At times, it provides additional flexibility, allowing for the possibility of making a payment even when there is a discrepancy in timing between the incoming revenue and the required expenses, enabling a temporary drawdown.”

“So, the aim is to keep within the letter of the law, I think that’s the main point.”

The welfare of Nigerians continues to be a primary focus for the current administration, with particular emphasis on ensuring the availability and affordability of food.

Edun stated, “We are making a concerted effort to guarantee the availability of domestically produced food. In the immediate term, in addition to the distribution from reserves, we have opened a window for importation, as Mr. President is committed to reducing prices and ensuring food accessibility.”

He reassured that this approach would not adversely affect local farmers, as importation would only occur after local supplies have been fully utilized.

He elaborated, “One of the prerequisites for this importation is that all locally available products in the markets or with millers must be exhausted. We will employ auditors to verify this.”

He noted that these measures aim to mitigate inflation, stabilize exchange rates, and lower interest rates, thereby fostering a favorable environment for investment and job creation.