Subsidy removal: FG earns over N1trn revenue in 4 months — Edun

Coordinating Minister of the Economy and Minister of Finance, Mr Wale Edun has declared an increase in the nation’s revenue from N650 million monthly to over N1 trillion in the last four months since subsidy was removed.

Recall that President Bola Ahmed Tinubu upon assumption of office as President announced an end to fuel subsidy in Nigeria.

Tinubu made the pronouncement while delivering his inauguration speech at the Eagle Square yesterday.

According to him, “We commend the decision of the outgoing administration in phasing out the petrol subsidy regime which has increasingly favoured the rich more than the poor. Subsidy can no longer justify its ever-increasing costs in the wake of drying resources.

“We shall, instead, re-channel the funds into better investment in public infrastructure, education, health care and jobs that will materially improve the lives of millions,” he said.

The declaration followed a backlash from Nigerians who have to go through pains due to the impact on the cost of goods and services.

However, the Minister of Finance yesterday revealed that the removal of subsidy was yielding intended results.

Speaking in Asaba at the opening ceremony of a four-day retreat organised for members of the Federation Account Allocation Committee (FAAC), the Minister, represented by the Permanent Secretary, Finance, Special Duties, Mr Okokon Udo said the government had for long, realised that petroleum subsidy was not sustainable.

According to him, the subsidy regime eroded revenues that should have been available to fund viable expenditures that were critical to the well-being of the populace.

The Minister said the present administration was mindful of the needs and welfare of Nigerians and assured that it would continue to implement peoples oriented policies.

“We all know that achieving the tax revenue to Gross Domestic Product (GDP) target of 22 per cent and tax to GDP of 18 per cent by 2026 are parts of the cardinal objectives of this administration.

“However, in doing that we appreciate the need not to overburden the tax payers by introducing so many new taxes.

“What is necessary to be done is to broaden the tax base, simplify and streamline tax administration for ease of collection,” he said.

Edun added, “Among the prior activities of this government after coming into office, was the constitution of a Presidential Committee of Fiscal Policy and Tax Reforms.”

“The committee has submitted an interim report which is full of optimism.”

The Minister also noted that the present administration was not oblivious of the untold hardship faced by Nigerians, following the removal of fuel  subsidy, and harmonisation of exchange rates.

He reassured that all the sacrifices made by people would never be in vain.

“Government is bent on ensuring that the economy bounces back to normal as we continue to consolidate on recovery efforts while focusing on achieving inclusive economic growth and development,” he added.

Edun said that President Bola Tinubu-led administration has so far put in place well-structured palliative measures to cushion the economic consequences of the ongoing reforms.

On the theme of the Retreat, “Creating a Resilient Economic through Diversification of the Nation’s Revenue,” the minister commended the choice, stressing that it was suitable.

Edun also noted that retreat clearly outlined the urgent need to diversify the nation’s economy.

In an opening remark, Gov. Sheriff Oborevwori of Delta tasked the federal government to muster the political will by putting necessary policy and institutional framework in place to diversify the nation’s economy.

The Governor, represented by his Deputy, Sir Monday Onyeme said that there was no magic wand to diversify the nation’s economy from over dependence on revenue from crude oil unless concerted efforts were made in other key sectors.

He noted that the diversification of the nation’s economy must go beyond mere rhetoric to concrete measurable steps by facilitating the non-oil exports such as agricultural products, manufactured goods and services as well as the expansion of the revenue base.

Oborevwori affirmed that Delta was taking the lead to diversify its economy by creating a Trade and Export unit to drive the process in order to make economic diversification a reality.

He noted that some schools of thought believed that the discovery of crude oil which led to the neglect of agriculture and other revenue yielding non-oil sectors of the economy was a curse.

Oborevwori said the country had not properly managed its oil wealth adding that it was worrisome that the oil  sector contributed between five per cent and seven per cent  of the nation’s  GDP.

He added that the non-oil sector mostly agriculture, agribusiness, manufacturing and small scale enterprises contributed 93 percent to 95 percent, yet the bulk of public revenue was from the oil and gas sector.

“Statistics have made it more exigent for the government to grow the non-oil sector to widen the revenue base, while ensuring that maximum benefits were derived from the e oil industry,” he said.

The Governor commended FAAC committee for its commitment to duty by enhancing revenue accruals into the federation account.

He urged the committee to look into the payment of 13 percent derivation to oil producing states.

Oborevwori challenged the committee to use the retreat to address the concerns raised by stakeholders in respect of the new roles of the Nigeria National Petroleum Company Limited, among others by giving better understanding on their roles in the economic diversification of the country.