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Tag: Fuel subsidy

  • Fayemi, fuel subsidy, and the danger of a single story

    Fayemi, fuel subsidy, and the danger of a single story

    By Tosin Durodola

    There is a familiar pattern in Nigerian politics. A short clip travels fast, gains outrage, and becomes the version of events that sticks. Nuance rarely survives that journey. The latest target of this treatment is Dr Kayode Fayemi, former Governor of Ekiti State, following the renewed circulation of a brief video in which he appears to dismiss the Occupy Nigeria protests of 2012 as “mere politics.” The clip is being reshared without the wider argument that surrounded it. Anyone who wants an accurate record of what he said should start with that missing context. The circulation of fragments is not trivial because such fragments quickly harden into collective memory.

    Once a phrase becomes the story, subsequent corrections struggle to gain traction, and public debate begins to orbit a caricature rather than the full account. Readers deserve a fuller reconstruction of events, sources, and sequence before settling on a judgment.

    The remark did not arise spontaneously this week. It came from a lecture Dr Fayemi delivered in September 2023 while speaking on democratic accountability and difficult policy choices. The subject of fuel subsidy reform was raised. He observed that the political class in 2012 had not presented a united front. In fact, the Action Congress of Nigeria, his party at the time, opposed subsidy removal in the heat of social pressure, even though governors in the Nigeria Governors’ Forum, which included ACN governors, had earlier supported President Jonathan’s decision because the subsidy regime was seen as corrupt and fiscally damaging.

    ACN politicians ultimately sided with the protests, not because the policy lacked merit, but because the politics of that moment demanded it. His plea was that leaders should face the issue honestly rather than shield themselves from backlash when reality hits. In other words, the political speech now circulating was a commentary on political behaviour, not a dismissal of public suffering.

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    Dr Fayemi has acknowledged his own role in that 2012 episode, noting that governors were caught between technocratic evidence and partisan mobilisation, eventually aligning with their party position despite personal conviction. The lecture also situated subsidy reform within a wider democratic test about trust, fairness, and the credibility of social protection measures.

    The reactions to that lecture prompted Dr Fayemi to write an article in Punch titled “Tackling the Danger of a Single Story.” In that piece he recognised that the Occupy Nigeria movement was driven by anger over economic hardship, distrust, and fear of deeper inequality. He did not trivialise those concerns. He argued that the policy itself became a casualty of partisanship. He also used the example to call for more responsible politics, especially where difficult reforms affect millions of ordinary people. His Punch article made clear that the ACN’s posture in 2012 was shaped by political calculations during ongoing merger talks that later birthed the APC. In retrospect, he regrets the tactical posture that contributed to policy reversal, and it was in that sense that he apologised directly to Jonathan at the 2023 lecture.

    To understand the full picture, we must recall what made the 2023 context fundamentally different. Unlike 2012, the 2023 political class was united on subsidy removal before the election. Tinubu, Atiku and Obi all campaigned on removing fuel subsidy.

    The agreement was clear. Yet by September 2023, after President Tinubu implemented the policy they all promised, both Atiku and Obi had already begun to criticise the administration. That reversal raised the spectre of history repeating itself. It was this development that informed Dr Fayemi’s warning at the lecture. His point was that Nigeria must not return to a cycle where parties weaponise a reform they publicly endorsed. He urged other leaders not to “pay Tinubu back in his own coin” the way ACN paid Jonathan back in 2012. The plea for consistency was unmistakable.

    Despite that clarification, the conversation resurfaced this week after a public event held on Tuesday. Once again the question of political will in 2012 was raised. Dr Fayemi repeated that governors had supported the policy in principle and that the administration failed to carry it through. This has now become the latest line pushed across social media. The impression being created is that he changed his position, or worse, that he now wishes to rewrite history. Both claims ignore the record.

    He has made the same argument consistently. Fuel subsidy reform was necessary. The politics around it were messy. The people bore the consequences. The cycle of selective outrage continues because a short clip is easier to circulate than a 45-minute lecture or a carefully argued rejoinder. It also shows why those who care about an accurate archive must track when a statement was made, to whom it was addressed, and how it relates to earlier or later clarifications.

    Nigeria has long struggled with society-wide trust in subsidy reform. Citizens hear promises of palliatives and safety measures but remember the years in which removal led to higher costs without visible relief. Politicians recognise the long-term need for reform but resist taking ownership of it when the street protests begin. Both sides know the stakes. Both sides have grievances.

    When analysis reduces this to good versus bad, or truth versus hypocrisy, the country loses a chance to examine what went wrong and why it keeps happening. A major part of the lesson from 2012 is that reforms of this scale cannot be managed on the back of political optics alone. Credibility, sequencing, and social protection architecture matter for legitimacy.

    This is why the sequence of Dr Fayemi’s comments matters. The clip being shared reflects a fragment of a wider concern about political evasion. His later writing gives the bigger picture that should have accompanied that fragment from the start.

    The renewed comments this week simply repeat his call for honesty on the subject. When viewed in order, the thread is clear. When timeline and intent are restored, the accusation of revisionism loses its force, and the focus shifts back to the structural failures of Nigeria’s political economy.

    No public figure is above critique. Dr Fayemi is no exception. If some Nigerians want to debate his position, that is fair ground. The issue is how that debate is framed. When a selective edit replaces the full argument, the result is a distorted record. That approach might score quick points online but does little for political memory. A serious democracy asks for more careful listening. If we apply that standard here, critique can become a space for learning rather than misrepresentation.

    Fuel subsidy reform remains one of the hardest policy issues in Nigeria. The hardship many citizens face since the latest removal shows why the protests of 2012 had real force. It also shows why political actors cannot afford to pretend they never supported the idea once the consequences become visible. That was the warning at the centre of Dr Fayemi’s lecture. It should be read with that intent in mind, not reduced to a clip stripped of context. Without a culture of policy accountability, the country risks repeating the same errors under different administrations.

    There is a better standard we can hold ourselves to. When public statements are examined, let the full words speak before judgment is passed. Context will not remove disagreement. It will at least ensure that the disagreement is an honest one. Nigeria deserves a political record built on accuracy and a more responsible path for the difficult decisions that lie ahead. When memory is curated responsibly, policy lessons stand a chance of surviving beyond the news cycle.

    Durodola, PhD, teaches politics, history, conflict, and displacement. He writes from Abuja

  • Fuel subsidy removal, anti-theft efforts boosting investor confidence – Oil sector player

    Fuel subsidy removal, anti-theft efforts boosting investor confidence – Oil sector player

    The removal of fuel subsidy and the ongoing fight against crude oil theft under President Bola Tinubu’s administration are restoring investor confidence and revitalizing the oil and gas sector, according to industry stakeholder Jordan Omagufi.

    Omagufi, Managing Director of Ufijor International Nigeria Limited (UINL), made the remarks on Monday during the opening of the company’s new branch office at ND Western Estate-Edjeba in Warri South Local Government Area of Delta State.

    He noted that as a seasoned procurement service provider in the oil and gas industry, he has observed firsthand how the removal of the fuel subsidy has helped stabilise Nigeria’s economy after years of setbacks.

    Omagufi also commended the federal government’s intensified efforts to combat oil theft through security agencies and the engagement of private pipeline surveillance firms, describing it as a major confidence boost for both local and international investors.

    “These policies have not only improved operational stability but are also creating an enabling environment for businesses to thrive in the sector,” he said.

    Read Also: Gains of fuel subsidy removal, by Bamidele

    “I thank Mr. President. From the onset when he announced the subsidy removal, I was happy because that was draining our economy.

    “Oil theft is a situation that has been left for long, so these guys have built a cabal. The process of fighting oil theft is gradual, and President Tinubu has shown commitment.

    “As the President is committed to ending oil theft, with time, and the sustained collaboration between the security agencies and private pipeline security firms, people will understand that this thing (oil theft) is hindering our economy,” the MD posited.

  • ‘Fuel subsidy removal step towards eliminating systemic corruption’

    ‘Fuel subsidy removal step towards eliminating systemic corruption’

    Senator Mohammed Sani Musa (Niger East) has described the the removal of fuel subsidy by the present administration as a step towards eliminating systemic corruption and redirecting resources to where they are truly needed.

    Musa made this assertion in a statement titled: “Clarifying my stance on subsidy removal and commitment to addressing citizens’ concerns” in Abuja.

    He, however, said the policy must be accompanied by strong measures to mitigate the impact on everyday Nigerians.

    The statement reads: “I appreciate your engagement and the concerns you have raised regarding my statement on subsidy removal.

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    “However, I would like to clarify my position, as it appears my point has been misunderstood or misrepresented.

    “When I said, ‘Removing subsidy is the best thing that happened to Nigeria,’ my assertion was not intended to overlook or diminish the economic challenges faced by Nigerians.

    “Rather, it was a statement grounded in the reality that, for years, subsidy payments have lined the pockets of a few powerful individuals at the expense of the nation.

    “Hundreds of billions of naira that should have been channeled into vital infrastructure, education, and healthcare ended up benefiting a few privileged, depriving over 230 million Nigerians of necessary resources and opportunities.

    “The removal of the subsidy is a step towards eliminating systemic corruption and redirecting resources to where they are truly needed.

    “However, I agree that it must be accompanied by strong measures to mitigate the impact on everyday Nigerians.

    “This includes strategic investments in social welfare programs, improvements in security, and support for economic growth at all levels, and that has been my focus.

    “I am deeply aware of the pressing issues of insecurity affecting even my Senatorial District for many years and other parts of the country.

    “I have not and will not remain silent on these matters, and I am committed to amplifying our voices and pushing for comprehensive strategies that address safety, economic empowerment, and equitable development.

    “Your concerns are valid, and I respect the vigilance of our community in holding leaders accountable.

    “My commitment is to act in the best interest of not only my constituents but the deprived and to work tirelessly toward a future where policies reflect the well-being and security of all Nigerians.”

  • FG declares end of fuel, FX subsidies

    FG declares end of fuel, FX subsidies

    The federal government has officially announced the termination of fuel and foreign exchange subsidies, marking the end of a long-debated policy.

    Minister of Finance and Coordinating Minister of the Economy, Wale Edun, made this declaration during the presentation of the Nigeria Development Update by the World Bank in Abuja on Thursday, October 17.

    Edun revealed that these subsidies had drained the country’s economy, costing over N10 trillion, which amounts to five percent of Nigeria’s Gross Domestic Product (GDP).

    “Fuel and FX subsidy are extinguished,” Edun said, as he emphasized the financial strain these policies had imposed on the nation.

    The minister also announced a new government plan aimed at addressing unemployment, with a focus on housing finance.

    This initiative, he explained, would feature a mortgage scheme offering near single-digit interest rates.

    The government expects this approach to boost construction activities and generate significant job creation.

    “The plan will be anchored around mortgage and housing financing,” Edun stated.

    At the same event, the Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, explained the rationale behind the recent half-percent interest rate hike.

    He disclosed that the Monetary Policy Committee (MPC) had anticipated the latest inflation trends, which drove their decision to increase the rate.

    “Policies and decisions will be based on evidence and data going forward,” Cardoso affirmed, underscoring the CBN’s commitment to data-driven policy formulation.

    Bauchi State Governor, Bala Mohammed, also participated in the discussion. He expressed concern over the insufficient funds allocated to state governments through the Federation Account Allocation Committee (FAAC).

    “The money coming from FAAC every month is not enough for state governments to provide infrastructure,” he lamented.

    Mohammed criticized federal policies, noting that they had reduced the purchasing power of Nigerians. “These policies are not working,” he declared, pointing to the hardship being felt by the masses.

    Regarding the implementation of the new N70,000 minimum wage, Governor Mohammed acknowledged the challenges states face.

    Read Also: ‘Why fuel subsidy must be removed totally’

    “Some states can afford N70,000, some cannot. We in Bauchi State are paying the old minimum wage religiously. We’re looking at paying the new minimum wage as soon as possible,” he added.

    He voiced concerns that while states are loyal to the wage law, the ability to fund essential infrastructure after meeting the new wage obligation remains a serious challenge. “We are about to be lynched,” he said, noting the pressure on state governments.

    From the private sector, Amal Hassan, CEO of Outsource Global Limited, urged the federal government to create a more attractive environment for investors.

    “The government must de-risk the economy to make it easy for investors to come in,” she said, adding that despite Nigeria’s negative global image, the country’s talent pool continues to attract attention from international businesses.

    World Bank Senior Vice President and Chief Economist, Indermit Gill, wrapped up the discussion by calling on Nigeria’s economic units, Monetary, Fiscal, and other units, to collaborate more effectively.

    He emphasised the need for unified efforts to drive economic reforms and growth.

    Details shortly…

  • ‘Why fuel subsidy must be removed totally’

    ‘Why fuel subsidy must be removed totally’

    The Chairman of the Independent Media and Policy Initiative (IMPI) Niyi Akinsiju has appealed to Nigerians to allow international market forces to determine the price of petrol.

    Akinsiju noted that fuel subsidies became Nigeria’s equivalent of an economic weapon of mass destruction before its removal by the administration of former President Muhammadu Buhari.

    According to him, subsidies strangulated Nigeria’s potential and burned up $30 billion that could have been funnelled into other uses, such as infrastructure, health and education.

    Akinsiju, who spoke at a news briefing in Abuja, said: “Nonetheless, this does not detract from the fact that fuel subsidies have become Nigeria’s equivalent of an economic weapon of mass destruction. The narration often shows how subsidies have strangulated the Nigerian nation’s potential and burned up $30 billion that can be funnelled into other uses, such as infrastructure, health and education.

    “In 2022, $10 billion was spent on fuel subsidies, representing 40 per cent of the country’s revenue. The petrol supply scenario is exacerbated by the annual $28 billion taken from the critical foreign reserve to import fuel.

    “This is in addition to the N1 trillion the country had to borrow to finance fuel subsidies in 2022.

    “A further examination of the subsidy regime shows that households in the bottom 40 per cent of the income distribution account for less than three per cent of fuel purchases at the pump.”

    He said former Military Heads of State, Gen Yakubu Gowon and Gen Olusegun Obasanjo (rtd) allegedly institutionalised petrol subsidy regime at a time when the Nigerian economy was very vibrant.

    According to him, these former military heads of state introduced subsidy as a short-term measure to cushion the rising international oil price.

    Read Also: Fuel subsidy ‘strangulated’ Nigeria’s economic growth – Akinsiju

    He said: “General Olusegun Obasanjo, then Military Head of State, formalised the petroleum subsidy regime into law when he numbered it among products for which the government would be responsible for fixing their prices and for which they should not be sold above the fixed prices.

    “This was a short-term measure to cushion the rising international oil price. It was intended as a temporary fiscal response to an oil price spike instigated by the actions of the Organization of Petroleum Exporting Countries (OPEC).

    “It is, however, instructive to note that under the two principal protagonists of subsidy, the price of petrol recorded increments in response to emerging economic realities. Under Gowon, the price increased by 40 per cent from six kobo a litre to nine kobo a litre, while under Obasanjo, it skyrocketed by 70 per cent from nine kobo a litre to 15.3 kobo a litre.”

  • Fuel subsidy

    Fuel subsidy

    • The heart of the matter

    Minister of Finance and Coordinating Minister of the Economy, Wale Edun, may have meant to put the issue of the fuel subsidy removal in context, particularly the issue of the cost of the road not taken. Nonetheless, his interview on AIT’s Moneyline programme broadcast on its YouTube channel has somewhat provoked searing questions about the nation’s readiness to terminate the obnoxious fuel import regime.

    The minister was quoted on the programme as saying that Nigeria pays $600 million each month on fuel imports. The country, he would particularly remind, lacked precise data on its domestic fuel consumption as a result of which fuel importation became an all-comers’ affair of sort.

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

    The answer, we daresay is obvious. Nigeria should have no business importing refined products in the first place, not to talk of a situation in which it would have to use its hard earned foreign exchange to subsidise fuel prices for its neighbours. Assuming that the nation’s four refineries are up and running, would the government still have made the argument about using its foreign exchange to subsidise our neighbours? And has the government stopped the monthly $600 million committed to fuel imports since subsidy was removed?

    Talking of fuel pricing, we do think also that the issue is somewhat overstated; it deflects from the more fundamental argument about government’s continuing inability to provide cheap, affordable and convenient means of transportation for every segment of the society. For, whereas the general assumption tends to be that most Nigerians would prefer their individual modes of transportation, the reality is that most would rather opt for cheaper, reliable and convenient alternatives were they to exist. Which is why the argument about pricing could have been better made had the government put the railways to work; by this we mean the Lagos – Kano – Maiduguri on the western axis and the Port Harcourt – Aba – Maiduguri on the eastern axis, to restore the glorious status of the once-thriving railway towns along the corridors and also to ease the movement of goods across the country. Nigerians can only now but wonder what difference the Presidential Initiative on Compressed Natural Gas would have made to the debate had the policy been introduced by preceding administrations.

    Read Also: Fuel subsidy: Another viewpoint

    For now, what appears to us to be at issue – for which Nigerians continues to be agitated – is why Nigeria’s refineries have remained comatose despite the billions of dollars already sunk into them.

    In July 2019, the then newly appointed Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC) Mele Kolo Kyari, had promised to fix all the country’s refineries before May 2023 when President Muhammadu Buhari would leave office. Five years on, the promise has remained unfulfilled. The same  NNPCL in August 2023 had promised to deliver the Port Harcourt Refinery by December 2023; it not only failed to deliver, but has been unable to commit itself to any completion date some eight months after its initial target date. And now the Dangote Refinery on which Nigerians had pinned their hope of an imminent rescue appears to have been mired in the same unending web of intrigues that have defined the sector.

    Again, to answer the minister’s question –the nation has far better use for the $600 million monthly haemorrhage than spend it on fuel imports. The earlier the government got the refineries – public and private – working, the better for the country.

  • No N5.4tr provision for fuel subsidy, says FG

    No N5.4tr provision for fuel subsidy, says FG

    There is no N5.4trillion provision for fuel subsidy this year, the Federal Government said on Thursday.  

    In a statement by Mr Bayo Onanuga, Special Adviser on Information and Strategy  to President Bola Ahmed Tinubu, the government said subsidy on fuel ended in May, 2023. 

    The government said its position has not changed. 

    “Our commitment to ending unproductive subsidies is steadfast, as is our dedication to supporting our most vulnerable populations,” the government said. 

    The government said it ” is committed to mitigating the effects of this removal and easing the cost of living pressures on Nigerians.” 

    It urged the public to disregard two fiscal documents in circulation that are being given wide coverage by the media , mainstream and social. 

    The documents are ” Inflation Reduction and Price Stability ( Fiscal Measures) Order 2024; and ” Accelerated Stabilisation and Advancement Plan( ASAP). 

    The statement reads: “The government wants to restate that its position on fuel subsidy has not changed from what President Bola Ahmed Tinubu declared on 29 May 2023. The fuel subsidy regime has ended. There is no N5.4 trillion being provisioned for it in 2024, as being widely speculated and discussed.”

    Read Also: Fuel subsidy was costing FG N400bn monthly – Edun

    The Coordinating Minister of the Economy further clarified: “As previously stated by government officials, including myself, President Tinubu announced the end of the fuel subsidy program last year, and this policy remains firmly in place. 

    “The Federal Government is committed to mitigating the effects of this removal and easing the cost of living pressures on Nigerians. 

    “Our strategy focuses on addressing key factors such as food inflation, which is significantly impacted by transport costs. With the implementation of our CNG initiative, which aims to displace high PMS and AGO costs, we expect to further reduce these costs. 

    “Our commitment to ending unproductive subsidies is steadfast, as is our dedication to supporting our most vulnerable populations”.

  • Fuel subsidy was costing FG N400bn monthly – Edun

    Fuel subsidy was costing FG N400bn monthly – Edun

    Wale Edun, Minister of Finance and Coordinating Minister of the Economy, stated that fuel subsidy was costing the federal government N400 billion monthly. 

    President Bola Tinubu, in his inauguration, declared the end of the fuel subsidy era to redirect funds towards developmental initiatives.

    Months after the announcement, Edun disclosed in an exclusive interview with Channels Television that the subsidy was draining N400 billion from the government’s finances monthly.

    Read Also: Why Tinubu can’t reverse fuel subsidy removal, by Emir

    He said: “In terms of the government’s finances, they have been revamped and repaired.

    “And it is not just the fact that there has been the removal of the petroleum subsidy which was costing N400 billion every month to the government at its height.”

  • Fuel subsidy windfall  

    Fuel subsidy windfall  

    • States finances under scrutiny

    From May 29, 2023 to date state governments have been smiling to the bank literally with larger purses of money as a result of the decision of President Bola Ahmed Tinubu to end fuel subsidy and allow the Naira to independently find its true value among currencies around the world. Assistant Editor NDUKA CHIEJINA reports on the windfall the state governments are currently enjoying and the cash is being deployed.

    Since President Bola Ahmed Tinubu assumed office in May 2023, state governments have experienced a significant increase in revenue, attributed largely to the removal of fuel subsidy. However, this windfall has been marred by allegations of mismanagement and lack of accountability by several state administrations.

    Data from the Federation Accounts Allocation Committee (FAAC) reveals a stark contrast in revenue allocations to states before and after the subsidy removal. For instance, Abia saw an increase from N4.573 billion to N6.409 billion, while Lagos experienced a rise from N12.392 billion to N14.970 billion.

    Despite these substantial increments, concerns have been raised regarding the utilization of these funds. Many states have been accused of diverting their allocations, converting them to dollars, and trading them while the naira depreciates. This alleged practice has led to a public outcry, questioning the transparency of state governments.

    The data underscores the need for greater accountability and oversight in the management of public funds at the state level. While the removal of fuel subsidy has provided a financial boost, it is imperative that these resources are utilized for the benefit of the populace and towards sustainable development initiatives.

    In response to these concerns, the Office of the Accountant General of the Federation (OAGF) has emphasized its commitment to transparency and accountability in government financial transactions. Mr. Bawa Mokwa, Director Press at the OAGF, affirmed that the office has consistently published details of monthly revenue allocations to the three tiers of government for 2023. He further stated that the OAGF is up to date in the publication of monthly revenue distribution and that this effort will be sustained.

    According to Mokwa, the revenue distribution for 2023 was published monthly in print and online media as well as on the OAGF’s website. He also noted that the details of the December 2023 revenue, shared in January 2024, have already been published on the website.

    While the OAGF’s commitment to transparency is commendable, the ongoing allegations of mismanagement underscore the need for continued vigilance and oversight in the management of public funds. Citizens remain vigilant, demanding accountability from their elected officials and advocating for prudent financial management practices.

    While efforts to enhance transparency are underway, it is imperative that state governments uphold the ideals of fiscal responsibility and ensure that the newfound revenue is utilized judiciously for the betterment of the nation and the welfare of its citizens.

    The data provided by Statisence highlights the substantial amounts received by states and their local government areas (LGAs) from the 2023 Federal Account Allocation Committee (FAAC). The figures reveal significant disparities in revenue allocation across different regions of Nigeria.

    Delta emerged as the top recipient with N483.57 billion, followed closely by Rivers with N426.84 billion and Akwa Ibom with N380.1 billion. Lagos, despite being a major economic hub, received N371.39 billion, while Bayelsa, another oil-rich state, obtained N268.34 billion.

    The data underscores the importance of holding governors and local government chairmen accountable for the utilization of these substantial funds. While attention is often focused on Abuja, the capital city, it is equally crucial to demand transparency and explanations from state and local leaders regarding the management of allocated resources.

    Foreign Inflows

    The World Bank through the Nigeria COVID-19 Action Recovery and Economic Stimulus (NG-CARES) programme adds another dimension to the narrative of state government finances.

    Firstly, it underscores the significant external financial support that state governments have received beyond their regular revenue allocations. The reimbursement of $420.48 million (equivalent to N210 billion) demonstrates the international community’s recognition of the need to support Nigeria’s recovery efforts from the COVID-19 pandemic and other economic challenges.

    Secondly, the NG-CARES programme is a state-led design, focusing on social transfer and livelihood, agriculture, and support for small and medium enterprises (SMEs), it highlights the importance of targeted interventions to address broader economic challenges beyond the immediate impact of the pandemic.

    Furthermore, the emphasis on transparency and accountability, including independent verification exercises and peer learning across states, aligns with the public’s demand for accountability in the management of public funds. The involvement of civil society organizations, NGOs, and oversight committees adds layers of scrutiny to ensure that funds are used effectively and efficiently.

    The extension of the programme’s closing date by 12 months to June 30th, 2024, provides states with additional time to achieve their goals and maximize the programme’s benefits, indicating flexibility and adaptability in response to varying state capacities and circumstances.

    Overall, the NG-CARES programme complements the increased revenue allocations resulting from the removal of fuel subsidies, providing additional resources for states to address economic challenges and support recovery efforts, while also emphasizing the importance of transparency, accountability, and peer learning in the effective utilization of these funds.

    The introduction of the State Action on Business Enabling Reforms (SABER) programme by the Federal Government in partnership with the World Bank is a significant initiative aimed at enhancing Nigeria’s business environment at the state level.

    For the states, this programme presents an opportunity to further improve their regulatory frameworks and administrative processes to attract investment, stimulate economic growth, and create jobs. By incentivizing and strengthening the implementation of business enabling reforms, such as land administration, regulatory frameworks for private investment, public-private partnerships, tax administration, and overall business regulatory environment, the SABER programme seeks to foster a conducive environment for businesses to thrive.

    The allocation of $750 million to the SABER programme demonstrates a substantial investment in supporting state-level economic development. If approved by the National Assembly as part of an External Borrowing Plan, this funding will provide states with the resources needed to implement reforms and initiatives aimed at improving the ease of doing business and attracting investments.

    The continuation of successful initiatives like the States Fiscal Transparency, Accountability, and Sustainability (SFTAS) Programme further emphasizes the government’s commitment to fiscal reforms and sustainable economic development. Acknowledging the achievements of the SFTAS programme, particularly in areas such as fiscal transparency, revenue mobilization, efficiency of public expenditures, and debt sustainability, underscores the importance of building on past successes and sustaining momentum in reform efforts.

    Overall, the launch of the SABER programme signals a collaborative effort between the Federal Government, state governments, and the World Bank to create a conducive business environment, diversify the revenue base, and promote economic growth and stability at the state level in Nigeria. It represents a proactive approach to addressing challenges and leveraging opportunities for sustainable development and prosperity across the country.

    Profligate State Governments

    The revelation that the Federal Capital Territory (FCT) and the 36 state governments collectively owe the Federal Government a staggering amount of N1,718,705,566,436.25 in outstanding liabilities for budget support loans sheds light on the profligate nature of some state governments and their failure to utilize financial support effectively in the interest of the general public.

    Despite the budget support extended by the central government to assist states in their fiscal operations, the accumulation of such substantial liabilities indicates a pattern of poor financial management and lack of accountability among state governments. The discontinuation of the budget support loan programme, effective July 2023, was a direct response to the unsustainable level of outstanding debts accrued by various states.

    This decision underscores the need for fiscal prudence and responsible financial management practices among state governments. The federal government’s commitment to allocating funds from the Federation Account to settle these outstanding liabilities demonstrates a proactive approach to addressing the issue and promoting sustainable fiscal management at the state level.

    The discontinuation of the budget support loan program will undoubtedly impact the financial operations of state governments, as they will no longer have access to additional funding through this channel. However, it is a necessary step to address the issue of outstanding debts and promote accountability in the utilization of public funds.

    Furthermore, the federal government’s emphasis on providing support to state governments through alternative means, such as technical assistance and capacity-building programs, highlights the importance of enhancing financial management capabilities and promoting effective resource utilization for development purposes.

    Solutions

    State governments have a unique opportunity to prioritize public needs and maximize efficiency with the increased revenue from FAAC allocations. Here are some concrete steps they can take to put the revenue they’re currently benefiting from to good use: They have to engage citizens to understand their most pressing needs, especially in healthcare, education, infrastructure, and security; Allocate funds based on the identified needs, ensuring a fair distribution across different regions and demographics and Make detailed budget breakdowns publicly available, outlining specific projects and expected outcomes.

    In order to maximize efficiency, the state governments must strengthen procurement processes by implementing clear and transparent procurement policies to prevent corruption and ensure value for money. They also have to utilize technology to automate processes, improve data management, and enhance transparency and they must collaborate with private businesses and civil society organizations to leverage their expertise and resources for efficient project implementation.

    In the area of transparency, the state governments have to publish regular financial reports and share detailed financial statements on a regular basis; make this accessible to the public in both online and offline formats; create independent committees with public representatives to monitor budget execution and project implementation and organize public forums and town halls to discuss budget plans and answer citizen questions.

    Other strategies include investing in sustainable projects that generate lasting benefits for future generations, decentralize decision-making and allocate resources directly to local governments and communities, and evaluate the impact of spending and adjust strategies based on outcomes and public feedback.

    It’s understandable that public concern exists over whether increased state allocations are translating into improvements in vital sectors like education, healthcare, and infrastructure. Based on the figures available, residents in the states have to demand for accountability and transparency. They have to actively engage in budget discussions, attend public hearings, and demand clear communication from state governments on how funds are being used.

    They have to track how funds are allocated and used for specific projects, and report any irregularities or misuse of resources and there should be increased public awareness and corrupt officials held accountable.

    Advocacy for Sector-Specific Reforms: State residents have to push for reforms that enhance teacher training, address infrastructure deficiencies, and increase access to quality education for all. They should also ask for expanded health insurance coverage, improved facilities and equipment, and better access to essential healthcare services. They should equally demand for transparent and efficient use of funds for projects such as roads, bridges, and power grids.

    What experts say

    Dr. Wahab Balogun of Ambosit Capital Managers calls for increased transparency and accountability regarding how increased allocations are utilized by state governments. This could involve measures such as publishing detailed budget breakdowns, establishing citizen oversight committees, and conducting regular performance reviews. He emphasized the need to combat corruption and the potential for funds to be misused without proper safeguards and public scrutiny.

    Balogun urged state governments to prioritize public needs in their spending, particularly in areas like education, healthcare, and infrastructure. He advocated for “conducting public consultations to understand citizen priorities and aligning budgets accordingly. It is important to have long-term development plans, going beyond short-term projects and investing in areas that will create sustainable benefits for future generations”

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    Furthermore, Balogun wants to see “increased engagement with stakeholders, such as citizens, civil society organizations, and the private sector. This could involve public forums, town halls, and partnerships to leverage expertise and resources for efficient project implementation. It is importance to have community empowerment, decentralization of decision-making and resource allocation to ensure projects address local needs and promote ownership”.

    Further weighing in on the utilization of increased revenue by state governments, Dr. Balogun emphasized the importance of data-driven decision-making and broader systemic reforms to address underlying challenges.

    According to him, “state governments have a unique opportunity to prioritize public needs and maximize efficiency with the additional revenue from FAAC allocations. The use of data and evidence to inform decision-making processes, investments in data collection, analysis, and impact assessments. By sharing data openly for public scrutiny, state governments can ensure transparency and accountability in the management of public funds”

    Furthermore, Balogun stressed the significance of evidence-based policymaking, emphasizing the importance of designing and implementing interventions based on sound data and best practices. This approach, he argued, will help state governments to achieve better outcomes and maximize the impact of their investments in key areas such as healthcare, education, infrastructure, and security.

    In addition to data-driven decision-making, Dr. Balogun called for broader systemic reforms beyond the immediate issue of state allocations. This includes addressing underlying socioeconomic challenges, strengthening institutions, and promoting good governance practices. He advocated for greater public participation in policymaking processes and holding government officials accountable for their actions.

    The political considerations surrounding increased FAAC allocations to Nigerian states are multifaceted and complex. Potential scenarios include politicians focusing on short-term gains rather than long-term development, federal-state relations and political allegiance influencing allocation decisions, the risk of using funds for electoral purposes, intra-state power struggles impacting distribution, and inter-party competition and public pressure.

    Navigating these considerations will require a delicate balance between short-term political realities and long-term development goals, with open dialogue, transparency, and strong checks and balances being crucial to ensure that increased FAAC allocations benefit all Nigerians.

    In his view, Mr Gbolade Idakolo, Managing Director/CEO SD&D Capital Management Limited said “the state governments are the greatest beneficiaries of the removal of subsidy and foreign exchange liberalisation which has brought increased revenue to the covers of the government.  In the first half of 2023 the FAAC allocation was between N400billion to N600billion and that increased drastically in the second half of 2023 to between N1.3trillion to N1.9trillion.

    “The state governments benefited immensely to the detriment of the people and we have not witnessed any meaningful development from most states who still owe salary arrears, pension and other loans. The states are expected to project the new administration’s push for renewed hope but they have not lived up to expectations instead it is business as usual for them. State governments need to wake up to their responsibilities if we are to witness meaningful development in this country because the federal government cannot do it alone”.

    States projected to receive N5.5tr windfall in 2024

    Projections indicate that the 36 states in Nigeria are set to receive a significant financial windfall through the Federation Account Allocation Committee (FAAC) in the year 2024, totaling N5.5 trillion.

    Compared to the N3.3 trillion distributed in 2023, it is anticipated that states will enjoy an additional allocation of N2.24 trillion, marking a substantial increase in revenue.

    A breakdown of the projected revenue allocation reveals varying amounts for different states. Leading the pack is Lagos State, expected to receive N596.63 billion, followed closely by Delta with N564.29 billion and Akwa Ibom with N510.02 billion.

    Other states slated to benefit from the windfall include Adamawa (N141.62bn), Anambra (N199.52bn), Bauchi (N196.12bn), Benue (N120bn), Borno (N201.87bn), Ebonyi (N108.32bn), Edo (N185.35bn), Ekiti (N81.85bn), Gombe (N99.6bn), Enugu (N120bn), Imo (N136bn), Jigawa (N107.5bn), Kogi (N138.17bn), Kwara (N125.45bn), Nasarawa (N96.95bn), Niger (N236.9bn), Kaduna (N84.39bn), Katsina (N148.06bn), Kebbi (N145.02bn), Ondo (N45.36bn), Osun (N99.09bn), Oyo (N201.27bn), Taraba (N112bn), Plateau (N151.42bn), Sokoto (N108bn), Yobe (N87.94bn), and Zamfara (N107.93bn).

    With such substantial revenue expected, states are poised to embark on various developmental projects and initiatives aimed at improving the welfare and infrastructure of their respective regions. However, effective utilization and accountability in the management of these funds will be crucial to ensuring equitable development and sustainable growth across Nigeria.

  • Fuel subsidy palliatives: FCTA distributes 12,000 bags of Rice

    Fuel subsidy palliatives: FCTA distributes 12,000 bags of Rice

    The Federal Capital Territory Administration (FCTA) has commenced the distribution of 12,000 bags of rice and maize to vulnerable households across the six Area Councils of the FCT.

    Distribution of the food items, scheduled to take place for two days, commenced on Monday at Kwali, Kuje, and Abaji Area Councils.

    Speaking on behalf of the FCT minister, Nyesom Wike, in Kwali, the Secretary of the Area Council Services Secretariat, Bitrus Garki explained that the exercise was part of the FCTA’s distribution of palliatives to vulnerable residents.

    He said each Area Council would get not less than 2000 bags of rice and maize.

    Garki said: “You may recall that about two weeks ago, the FCT Administration organised an event where some of the food items were distributed to various groups.

    “This includes Area Councils, representatives of 17 Chiefdoms, religious organisations, civil servants, and vulnerable groups.

    “The feedback we received from that exercise was incredibly encouraging, which is why we are expanding the distribution today.

    “Today, we are gathered here to carry on with this noble gesture, aligning it with the renewed hope agenda of President Bola Tinubu, which aims to instill hope for a better future for all Nigerians.

    “Under this phase of the distribution, we are bringing the items closer to the people, ensuring direct outreach to the vulnerable groups, taking place simultaneously in all the six Area Councils of the FCT.”

    The Secretary urged the beneficiaries to utilize the items for the betterment of their families.

    He advised them against selling the items.

    He stressed that the gesture was meant to provide sustenance in this challenging time.

    According to him, the initiative was an integral part of the Federal Government’s approach to mitigate the effects of the removal of fuel subsidy which unfortunately has resulted in increased food market prices.

    Garki said: “We recognise the challenges faced by our fellow citizens and it is our responsibility to address these hardships and provide necessary support during these challenging times”.

    The chairman of Kwali Area Council, Danladi Chia, commended the Tinubu and FCT Minister for the support and promised to ensure equitable distribution of the palliatives to the target beneficiaries.

    In Kuje Area Council, the chairman Abdullahi Suleiman Sabo, assured that the food items would get to every vulnerable person in his Council.

    Sabo noted that his Council was known for integrity and honesty, believing that he would give an account of his stewardship to God one day.

    He pledged to ensure that intended beneficiaries of the items would get them.

    Read Also: FCTA to revoke houses converted to other uses – Official

    He expressed gratitude to President Tinubu and Wike for the items, decrying that though Kuje boasts of the largest landmass in the FCT, it could not reap its agricultural potential due to insecurity which continues to bedevil the Council.

    Beneficiaries who spoke to reporters at the three area councils also commended the President and FCT Minister for the palliatives.

    Philip Maikasuwa, a leader of disabled persons in Kuje, however, appealed for consideration for gainful employment.

    Another beneficiary, Rashidat Tauheed, a graduate of FCT College of Education, said that the disabled persons would never forget the gesture.

    She also appealed to be gainfully employed by either the federal government or the FCTA.