Zainab Ahmed, minister of finance, budget and national planning, has stated that petrol subsidy is “hurting the nation” and limiting the federal government’s ability to service debt.
The World Bank, in its Nigeria’s Development Update (NDU), launched on Tuesday, projected that fuel subsidy would gulp N5 trillion in 2022 — more than Nigeria’s N4 trillion subsidy budget.
Speaking at the hybrid launch of the World Bank’s report, the finance minister urged Nigerians to understand that petrol subsidy is causing a massive fiscal burden, thus impeding the country’s economic growth.
She stated that important investments in the oil and gas sector are being delayed because of the heavy fiscal burden of fuel subsidies.
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“This premium motor spirit (PMS) subsidy is costing us an additional N4 trillion than was originally planned. So, this is an unplanned deficit,” Ahmed said.
We have gone to the National Assembly; we have gotten approvals, but the approval was simply for us to cut down on some of the investment costs.
“So, investments that we needed to make in oil and gas sector which we are delaying and deferring to a later time and reducing the rollout of those investments. But we also had asked that we needed to borrow more which is very serious.
“Already we have borrowing increasing significantly and we are struggling with being able to service debt because even though revenue is increasing, the expenditure has been increasing at a much higher rate so it is a very difficult situation.
“So Nigerians need to understand that this PMS subsidy we are carrying now is hurting the nation, it’s impeding the government’s ability to be able to invest in human capital development.”