Fuel subsidy removal triples FAAC allocation to N3.2tn – Presidency
The removal of fuel subsidies by President Bola Tinubu's administration has resulted in a significant increase in revenue shared by the federal, state, and local governments, rising from N760 billion in 2023 to N3.2 trillion in 2024.Sunday Dare, Special Adviser on Media and Public Affairs to the President, revealed this during an interview on Arise Television's Prime Time on Thursday night.
Dare stated that before the subsidy removal, Nigeria was losing $7.5 billion per year, which he considered unsustainable.
He urged Nigerians to hold state governors accountable for making good use of the increased revenues, emphasising that the subsidy removal has freed up funds that can be directed towards critical human capital development.
"If you don't take the stitch you need right away, you may have to take a lot of stitches later on. "This country was haemorrhaging," Dare explained.
He emphasised that for more than three decades, successive administrations had refrained from eliminating the subsidy, despite its inefficiency and corruption-ridden structure.
He emphasised that during this time, 87 Nigerian companies and individuals were involved in subsidy scams, resulting in billions of naira in losses for the country.
"At the point he [President Tinubu] entered, two brakes were required. Take a look at 30 years of this country skirting subsidy removal. We were losing $7.5 billion per year. "We had a period when 87 Nigerian companies and individuals were declared wanted for corruption related to subsidy scams," he stated.
Dare explained that the removal of the subsidy resulted in a significant shift in Federation Account Allocation Committee (FAAC) disbursements. While the total monthly allocation was N760 billion in 2023, it has risen to N3.2 trillion by 2024.
"The resources that have been freed up for human capital development, and one particularly poignant fact is that in 2023, the FAAC was shared by the 36 states and the federal government, totalling N760 billion.
"By 2024, that figure had increased to N3.2 trillion. Now, when it comes to governance, there are two levels: federal and subnational. Each month, these funds are distributed. It has tripled for the state government. So the subsidy has freed up resources. He maintained that if the subsidy was not removed, the figure would not have risen to 3.2 trillion.
Leave A Comment