The Minister of Finance and Economic Development, Zainab Ahmed has said that if Nigeria continues to pay subsidy on fuel, it may run into a situation where it will be paying N3 Trillion annually on the subsidy.
“If we don’t remove the subsidy that is what it will be costing us. This is the money that we can use to apply to health and to education.”
The Minister, who briefed newsmen yesterday, November 24 shortly after the meeting of the Federal Executive Council (FEC), at the Presidential villa, Abuja, recalled that even the Petroleum Industry Act (PIA) has a provision that all petroleum products must be deregulated.
“And in the 2020 budget, we made a provision to assume that at the maximum by the end of June, we must exit subsidy.
“In the last FAAC, the subsidy cost to the Federation was N243 billion. We look at a cost of about 250 billion per month, because it has been increasing consistently. So we are expecting something around N120 billion per month from NNPC.
“And now, we are getting to a point where NNPC will be remitting near zero. And if we don’t stop, we will get to a point where we will tell you pay me this for managing the fuel provision in the country.”
Zainab Ahmed said that between 20 and 40 million Nigerians will benefit from the intervention the government is planning to provide, adding that there is still a lot of work going on.
“We have a committee that is chaired by His Excellency, the Vice President, state governors and a few of us ministers as members.
“So we have to have a landing as to the exact number between 20 to 40 million. “We already agreed it will be N5,000 and we have also agreed that the remittances have to be done digitally.
“So the e-naria will help, but also so are the various payment platforms that are currently available. What we will not do is paying people in cash.
“The transfers that people will receive will be through one kind of electronic money or the other and it’s meant to be for a period of six, nine or 12 months.
“These are the things that we are still in negotiation because it’s still money that would have to come from the Federation account.
“Everybody that is a member of FAAC will have to agree on the numbers. The maximum will be 12 months, the minimum will be six months.
“We thought it was important to do this to give people a chance to adjust before the other support measures that the government is working on materialise and that is the provision of alternative to PSM which is CNG that is having mass transit vehicles converted to CNG.
“And also the printing on stream of petroleum refineries, including the Dangote refinery so that it reduces even the need to import the PMS in the first place.
“So that’s the logic behind targeting the middle of next year. This money is meant to provide relief to the very poor in the variable.
“On the experience we have had on the conditional cash transfer, it shows that that N5,000 that some people think is small actually makes a difference to families. It helps them to provide not only their basic needs, but we have seen women who are caregivers of those farmers actually start doing small trade, and they are able to maintain themselves thereafter.
“So in a way, it is not just consumption, it also helps to improve the productive activities of people that are at the bottom of the pyramid. And I remember during the COVID-19 pandemic, we had more people becoming vulnerable, especially in the urban area. So we are not covering only the rural areas but also the overburden, the urban poor.”