The federal government has said that President Bola Tinubu‘s elimination of the petrol subsidy has helped fund 40 important road projects throughout Nigeria in just two years, putting an end to a historic financial drain that cost the country over $84 billion.
This was disclosed in a policy explainer published by the National Orientation Agency and titled “Two Years Later: Key Benefits of Subsidy Removal”, obtained by our correspondent on Sunday in Abuja.
The document, which assessed the gains of subsidy removal since May 29, 2023, stated that the policy saved the country from imminent economic collapse and enabled the Tinubu administration to settle decades-long financial obligations, ramp up capital expenditure, and stabilise subnational economies.
“For decades, particularly since the advent of the current democratic dispensation, a major albatross of the Federal Government had been the oil subsidy regime. Successive administrations’ zeal to tame the menace had proved a fiasco while the economy continued to haemorrhage profusely. However, by 2015, many Nigerians had reached a consensus that it was high time the subsidy was consigned to the dustbin of history, as the subsidy budget in 2022 rose by 700 per cent to N4tn, the highest ever in subsidy history.
“Between 2005 and 2022, successive governments spent $84.39bn on fuel subsidies. These subsidies consumed over 70 per cent of potential federal revenue, pushing the country to the brink of bankruptcy. But with the bold decision to remove it, Nigeria is now saving billions and investing in real infrastructure,” the agency stated.
According to the NOA, Tinubu’s widely debated “subsidy is gone” declaration on his first day in office ushered in tough reforms that have since yielded tangible fiscal gains across various sectors. One of the major outcomes of subsidy removal, the NOA noted, was the improved financial autonomy of state governments.
It said, “Removal of subsidy not only saved the entire economy from imminent collapse, it also rescued several states of the federation from bankruptcy. Upon the take-off of this incumbent administration, Nigeria was spending 97 per cent of its revenues to service debts until its debt profile exceeded N100tn.
