Despite claims by the government that “subsidy is gone,” Nigeria is expected to spend over N5.4 trillion on fuel subsidies in 2024 – N1.8 trillion more than in 2023 and more than twice as much as under former President Muhammadu Buhari in 2022.
This was revealed in the draft copy of the Accelerated Stabilisation and Advancement Plan (ASAP) presented to the presidency by Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, on Tuesday.
“At current rates, expenditure on fuel subsidy is projected to reach N5.4 trillion by the end of 2023. This compares unfavourably with the N3.6 trillion in 2023 and N2.0 trillion in 2022,” the ASAP draft read in part.
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Edun had earlier hinted at the presentation in an interview on Sunday while responding to a question about the exit of multinationals. According to the minister, the advancement plan would consider and address the challenges facing Tinubu’s economic reform attempts.
At his swearing-in ceremony in May 2023, President Tinubu announced his administration’s plan for subsidy removal by declaring that “subsidy is gone”. He doubled down by stating that his administration had made no provisions for subsidies in the 2023 budget or for the 2024 fiscal year.
However, claims that subsidies were not removed sprung up a few weeks into Tinubu’s administration. In October, Festus Osifo, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), disclosed in an interview that the Nigerian government still paid fuel subsidies despite Tinubu’s announcement in May.
During the presentation of the Nigeria Development Update about two months after, Alex Sienart, World Bank’s lead economist for Nigeria, also mentioned that the cost of fuel in Nigeria was not cost-reflective and that the federal government still paid subsidies.
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Reacting to Sienart’s statement in the same month, Mohammed Idris, the Minister of Information and National Orientation, maintained that the “era of subsidy is gone”.
“Subsidy is gone, and the President told Nigerians from his first day in office that there won’t [sic] be subsidy. It is because subsidy has gone that we have so much money available for government to do so many things. Of course, it’s never enough, but fuel subsidy is gone and it’s gone for good,” said Sienart.
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Recently, on May 29, Heineken Lokpobiri, Minister of State for Petroleum, doubled down on the stance of the federal government while presenting a scorecard of his ministry in Abuja.
If the finance minister’s projection is right, Nigeria will spend an average of N450 billion per month on subsidies.
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