President Muhammadu Buhari, on Friday, pushed for the removal of fuel subsidy in 2023, saying that the policy is not sustainable considering current economic realities.
He shared the position while presenting a N20.51 trillion 2023 budget proposal to the National Assembly.
He said, “Petrol subsidy has been a recurring and controversial public policy issue in our country since the early eighties.
“However, its current fiscal impact has clearly shown that the policy is unsustainable. As a country, we must now confront this issue taking cognizance of the need to provide safety nets to cushion the attendant effects on some segments of society.”
According to the President, discontinuing the policy is necessary for the country to manage limited resources.
“As we seek to grow our government revenues, we must also focus on the efficiency of utilization of our limited resources,” he said.
“Critical steps we are taking include immediate implementation of additional measures towards reducing the cost of governance and the discontinuation of fuel subsidy in 2023 as announced earlier.”
The President, however, hinted that provisions would be made to cushion the effects of subsidy removal.
“We are however mindful of the fact that reducing government spending too drastically can be socially destabilizing, and so will continue to implement programmes to support the more vulnerable segments of society,” he said.
The N19.76 trillion proposed for the 2023 budget represents a 15.37 percent increase on the 2022 budget.
In reviewing recent economic developments, the President warned of the dangers of revenue shortfalls.
“Mr. Senate President and Rt. Honourable Speaker, revenue shortfalls remain the greatest threat to Nigeria’s fiscal viability,” he said.
To check that threat, he explained that the Federal Government has accelerated efforts towards ensuring that all taxable Nigerians declare income from all sources and pay taxes due to the appropriate authorities.
He added, “We are also monitoring the internally generated revenues of MDAs to ensure they are appropriately accounted for and remitted to the Consolidated Revenue Fund.
“The 50 percent cost-to-income ratio in the Finance Act 2020 has significantly improved operating surplus remittances by Government Owned Enterprises (GOEs).”
He called on the National Assembly to continue cooperating with the Federal Government in enforcing the legal provision and other prudential guidelines imposed on the GOEs during the consideration of the budget proposals of the GOEs.
Efforts to tackle the threat of revenue shortfalls are already working, according to the President.
“I am happy to report that the revenue collection and expenditure management reforms we are implementing are yielding positive results, with recent significant improvements in non-oil revenue performance,” President Buhari said.
“However, while we continue to implement revenue administration reforms and improve our collection efficiency, we urgently need to find new ways of generating revenue.”