Soludo joins the World Bank, IMF, others to demand subsidy removal
By Jeph Ajobaju, Chief Copy Editor
Anambra Governor Charles Soludo has joined those seeking the removal of fuel subsidy, his new agitation coinciding with disclosure by the Nigerian National Petroleum Corporation (NNPC) that N1.217 trillion subsidy was deducted from the Federation Account between January and May.
Shortfall in the Federation Account means less money to be shared by the three tiers of government – federal, states, and councils.
Soludo, a professor of economics, opposed fuel subsidy when he was Central Bank of Nigeria (CBN) Governor, aligning with the World Bank and the International Monetary Fund (IMF) both of which have long criticised it.
However, the World Bank and the IMF ignore the fact the European Union (EU) pays millions of Euros yearly in subsidy to farmers to guarantee food production and food security.
Soludo argued that fuel subsidy should be charged from the federal government, not subnational states, and should have been removed since “like yesterday” because it could cause the CBN to spill money.
He spoke at the launch of the Nigeria Development Update (NDU) by the World Bank Group in Abuja, where he stressed that solutions to Nigeria’s problems are obvious and not far-fetched.
Said he: “The federal government decides that it wants to subsidise Premium Motor Spirit, (PMS), why do you have to charge it from the subnational states? You should charge it from the revenue of the federal government.
“We need to have this conversation, the politics, and structure of the government and so on. We cannot do the same thing over and over again and expect a different result; it’s not going to happen.
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Long running analysis
“We’ve had this analysis for a decade, the same analysis and conclusions of what to do.
“Remove this subsidy like yesterday, this ought to have been removed like yesterday. If we continue with the subsidy, Central Bank will continue to spill money. The solutions are pretty obvious. What we need to do is to be committed to it,” Soludo added, per Vanguard.
The World Bank on Nigeria’s inflation
The World Bank NDU report disclosed that inflation has pushed about 15 million more Nigerians into poverty between 2020 and 2022, increasing the number from eight million between 2020 and 2021.
“Increased inflationary pressures following the Ukraine war are expected to push even more Nigerians into poverty.
”Before the war, higher inflation pushed an estimated eight million more Nigerians into poverty between 2020 and 2021,” the report said.
NNPC on fuel subsidy
The NNPC disclosed in its May 2022 report to the Federation Accounts Allocation Committee (FAAC) that subsidy cost the Federation Account N1.217 trillion in the first five months of 2022.
It said N271 billion was deducted for subsidy from its remittance for May, bringing total deductions for the year to N1.217 trillion, and an additional N874.5 billion would be deducted in June.