Economy

Presidency say Nigeria will continue to borrow due to the suspension of the removal of fuel subsidy

Nigeria may have to continue to borrow due to the suspension of the removal of fuel subsidy, the Presidency said on Wednesday.

On Monday, the Minister of Finance, Budget, and National Planning, Mrs Zainab Ahmed, said removing fuel subsidy at this time would be problematic, thus the decision has been suspended. In 2021 alone, the Nigerian Senate approved some loan requests by the government. This included the approval of $6.1 billion, as well as the $16,230,077,718 and €1,020,000,000 loan requests in July and November respectively.

The President’s Special Adviser on Media and Publicity, Femi Adesina, stated this during an interview on Channels Television’s flagship breakfast programme.

“Head or tail, Nigeria will have to pay a price,” he said. “It’s either we pay the price for the removal in consonance and in conjunction with the understanding of the people, but if that will not come, the other cost is that borrowings may continue, and things may be difficult fiscally with both the states and the Federal Government.

“You know how much could have been saved if the subsidy was removed and how it could have been diverted to other areas and spheres of national life. But if you do not go that way now – and I agree that it may not be auspicious to go that way, then we have to pay a price.

According to Adesina, oil prices have been fluctuating globally for years as a result of one reason or the other, particularly due to COVID since 2019.

He stated that the price witnessed a decline as low as $30 per barrel, but later rose above $80 per barrel.

The President’s spokesman noted, the government across the world is always mindful of its actions and decisions in a pre-election year, citing the developments in the United States and their impacts on the country’s poll.

He also debunked claims that the present administration’s proposal to extend the removal of fuel subsidy by 18 months was intended to booby-trap the next president.

“That was not the intention, the intention was also stated – the timing is not right, it will exacerbate the hardship of the people and the President genuinely cares,” Adesina said.

“Politics is a part of our lives, but elections will just be one event in the life of the country. When elections come, they go, the country continues. This fuel subsidy, whether it stays or goes, is going to have a serious impact on the economy.”

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