• Says no plan to remove fuel subsidy
Ndubuisi Francis in Abuja
The federal government has reaffirmed its position that in spite of the growing apprehension over the nation’s mounting debt profile, Nigeria’s borrowing still remains low at 19 per cent to Gross Domestic Product (GDP) when compared to Ghana, Brazil, South Africa, Egypt and Angola.
The Minister of Finance, Mrs. Zainab Ahmed, who stated this against the backdrop of reports surrounding the purported removal of fuel subsidy, said at 19 per cent to GDP, the borrowing is below the threshold permitted by the Fiscal Responsibility Act.
In a statement issued by her media aide, Paul Ella Abechi, the minister said: “In the borrowing, we are still at 19 per cent to GDP. Our borrowing is still low. What is allowed by our Fiscal Responsibility Act is the maximum of 25 per cent of our GDP, compared to other countries like Ghana, Egypt, South Africa, Angola and Brazil. We are the lowest in terms of borrowing.
However, the minister noted that the challenge facing the country was that of revenue generation.
“What we have is revenue problem and when revenues perform the aggregate rate of 55 per cent. it hinders the ability to operate in our budget,” It hinders our ability to service all categories of expenditures including salaries, allowances, capitals as well as debts,” she said.
Her ministry, she stated, is not resting on its oars with regards to boosting the nation’s revenue.
“So what we are doing at the Ministry of Finance is concentrating and enhancing our revenue and collection capacities”, she stated.
On subsidy removal, she maintained that there was no such plan, noting it was just an advice by the International Monetary Fund (IMF) at the just-concluded Spring Meetings in Washington DC, United States of America.
According to her, unlike the previous regimes where subsidy was paid to marketers, this time around, “NNPC is the sole importer of petroleum products.”
“And so, when they import, it is the cost of business and they deduct that cost before they remit the little money to the federation account. So that is completely different. It is more cost effective. It is cheaper and what is being done now is easier to monitor what transpired.”
The minister assured that there is no intention to remove subsidy as reported in some sections of the media, adding that the government is yet to come up with any plan in that direction.
“We are not there yet and we discuss this periodically under the Economic Management Team, but we have not found a formula that works for Nigeria and you know Nigeria is unique because what works in Ghana may not work in here.
“So it is still work in progress and so there is no intention to remove fuel subsidy at this time,” she assured.