Wale Edun, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, has disclosed that the country is currently spending $600 million per month on fuel imports. This significant expenditure is partly attributed to neighboring countries benefiting from Nigeria’s fuel imports.
Edun made the announcement during an interview on AIT’s Moneyline program, which was posted on the network’s YouTube channel on Wednesday. He explained that the high import costs were a key factor in President Bola Tinubu’s decision to remove the fuel subsidy, as the government could not accurately determine the domestic fuel consumption.
According to a report from the National Bureau of Statistics, petrol imports have averaged one billion liters per month since the removal of the fuel subsidy on May 29, 2023. Edun highlighted that the subsidy was removed to address the inefficiencies in its distribution, noting that the poorest 40% of the population were receiving minimal benefits from the subsidy.
The finance minister emphasized that Nigeria’s fuel imports were not only serving the domestic market but also benefiting countries to the east, north, and west of Nigeria. He stressed the need for decisive action to address the issue, as it impedes the country’s economic growth.
Edun also addressed the N570 billion fund released to state governments, clarifying that this amount was part of a reimbursement from December of the previous year under the COVID financing protocol. He noted that the funds were intended to support food production and ensure food availability and affordability.
Additionally, Edun discussed the recent increase in the maximum borrowing percentage in the Ways and Means facility from five to ten percent. He clarified that this increase does not imply an intention to rely on the Central Bank of Nigeria for financing. Instead, the government has used market instruments to manage its debts. The increase was described as a fail-safe measure to provide extra flexibility for managing payments and gaps in revenue.
Edun reaffirmed the government’s commitment to the welfare of Nigerians, particularly in ensuring food security. He assured that importation of food would only be permitted after exhausting local supplies and would be monitored by auditors to avoid undermining local farmers. The goal of these measures is to reduce inflation, stabilize exchange rates, and lower interest rates, creating a favorable environment for investment and job creation.
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