The President of the African Development Bank, Dr Akinwumi Adesina has decried the fuel subsidy regime by the Federal Government, saying it only benefits the rich.
Speaking during the presidential inauguration lecture in Abuja on Saturday, Adesina said the continued payment to subsidise petroleum products is killing the Nigerian economy.
According to him, fuel subsidy cost the economy of Africa’s most populous nation $10 billion alone in 2022.
He explained that Nigeria keeps borrowing for what shouldn’t be borrowed for, advising that such money should be channelled to national development.
“The place to start therefore is to remove the inefficient fuel subsidy. Nigeria’s fuel subsidies benefit the rich, not the poor, fuelling theirs and the government’s endless fleet of cars at the expense of the poor,” he stated.
“Estimates show that the poorest 40 per cent of the population consume just three per cent of petrol.
“Fuel subsidies are killing the Nigerian economy, costing the economy of Nigeria $10 billion in 2022. That means that Nigeria is borrowing what it doesn’t have to borrow.”
Rather than spending billions on crude oil, the AfDB boss called on the Federal Government to support private-sector refineries as well as modular refineries for efficiency and competitiveness.
The move, according to him, is necessary to drive down the pump prices of petroleum products.
He commended the President Muhammadu Buhari administration for commissioning the Dangote Refinery in Lagos, recently, saying the project will revolutionise Nigeria’s economy.
Adesina also commended Africa’s richest man, Aliko Dangote, for investing $19 billion to construct the refinery in the country.
Reduce Cost Of Governance
While giving his talk, the former agriculture minister made a case for a reduction in the cost of governance in the country.
Describing governance cost as too high, Adesina said it should be “drastically reduced to free up more resources for development”.
To the AfDB President, Africa’s most populous nation spends very little on development, a situation that may be responsible for being ranked among the countries with the lowest human capital index globally.
He canvassed for a change in the current statistics, urging the Nigerian authorities to rely more on the private sector for infrastructure development to reduce the burdens of the Federal Government.
Speaking on the tax drive, Adesina wants the Federal Government to increase the tax generation in the country.
Specifically, he wants the government to move from tax exemption to tax redemption and also ensure that multinational companies pay appropriate royalties and taxes. He also wants the Nigerian authorities to block tax leakages in revenue collection.
Noting that simply raising taxes is not enough, the AfDB boss wants the Nigerian government to provide the basic amenities to the masses.
“Nigerians therefore today pay the highest implicit taxes in the world. The government needs to ensure an effective social contract by delivering quality public service.
“It is not the amount collected, it is how it is spent and what is delivered. Nations that grow better run effective governments that assure social contract with their citizens,” he added.