In a groundbreaking development aimed at mitigating the impact of petrol subsidy removal, the Federal Government has taken a significant step by disbursing a total of N2 billion to each of the 36 States in Nigeria and the Federal Capital Territory (FCT). This move is part of the N5 billion palliative package recently announced by the government to cushion the effects of the subsidy removal.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, made this exciting revelation during a press briefing held on Friday. He outlined some of the headline policy plans designed to boost the nation’s economy, highlighting the unique blend of grant and borrowing employed by the federal government to extend this financial assistance.
Importantly, Minister Edun clarified that this fund is entirely distinct from the proposed $800 million World Bank loan, which is also intended to ease the impact of the subsidy removal. The decision to release N2 billion to each state and the FCT at this time was made with a strategic consideration in mind – to prevent a sudden spike in inflation figures that could result from releasing the entire N5 billion package at once.
The Minister emphasized that while the government is committed to supporting the nation’s economy, it will not solely rely on borrowing to finance the national budget. Instead, the government will focus on mobilizing revenue through enhanced oil production to boost foreign exchange reserves. Furthermore, the administration is actively working to create a conducive environment for both local and foreign investors, thereby fostering job creation and economic growth.
The government’s economic plan, as outlined by Minister Edun, revolves around three key pillars: increasing revenue, effective debt management, and the automation of revenue collection to curb leakages. This strategy aims to create a fertile ground for private sector players to invest and thrive, ultimately leading to a more robust and sustainable economy.
Adding to this pivotal announcement, Mele Kyari, the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), highlighted the necessity of removing the gasoline subsidy. He asserted that the NNPCL would have faced the risk of bankruptcy if the subsidy had not been eliminated under President Bola Tinubu’s leadership.
Furthermore, Kyari shared encouraging news about the country’s crude oil production, which stood at 1.7 million barrels as of the previous Wednesday. This increase in oil production, combined with the subsidy removal, is expected to generate more revenue for the government, setting the stage for a brighter economic outlook.
This bold move by the Federal Government signifies its commitment to ensuring the long-term prosperity and stability of the Nigerian economy. As the nation takes these significant steps towards financial sustainability, there is optimism that it will pave the way for a more prosperous future for all citizens.
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