Nigeria spent over N13 trillion on petrol subsidies in 16 years, the Federal Government said yesterday.
Mustapha spoke in Abuja at the launch of the Nigerian Extractive Industries Transparency Initiative (NEITI) 2022 – 2026 Strategic Plan.
He said the Presidential Transition Council (PTC) would release the guide that emanated from the discussions on the Premium Motor Spirit (PMS) petrol subsidy to the incoming administration of President elect Bola Tinubu.
“From that Policy Advisory, over N13 trillion (N74billion) is documented to have been expended on the payment of subsidy between 2005-2021,” he said.
He assured Nigerians that the Federal Government had been keenly following subsidy conversations having borne the burden of fuel subsidy over the years.
“While we remain open to the ongoing debate, a comprehensive position to guide the incoming administration on when and how to make this decision is being developed by the Presidential Transition Council which I currently head,” Mustapha added.
According to him, the N13 trillion figure in relative terms is equivalent to the country’s entire budget for health, education, agriculture, and defence in the last five years.
It was also, he added, almost the capital expenditure for 10 years between 2011 and 2020 if the government computed in financial terms other economic and opportunity costs to the nation.
The opportunity cost of petrol subsidy, he explained, included the slashing of allocations for the health, education, and technology infrastructure sectors and the deterioration of the downstream sector with the declining performance of Nigeria’s refineries.
Others were a disincentivized private sector investment in the down and mid-stream petroleum sector; low employment generation since the refining process is done outside the country’s shores and inefficient supply arrangements which often lead to scarcity and its attendant queues.
The SGF said the government had also noted other debates around subsidy removal, including the need to fix national refineries and the creation of visible safety net programmes to reduce the impact on the poor and vulnerable, especially workers.
He referenced the “strong argument” on adequate mechanisms to be put in place to ensure that the revenues that will accrue from subsidy removal are prudently managed and channelled to the development of key infrastructure and other areas of national development.
There is “no doubt that the incoming administration will consider our position on the issue and make an informed decision in the overriding public interest,” Mustapha added.
Meanwhile, NEITI Executive Secretary, Orji Ogbonnaya Orji revealed that the Federal Government earned $ 394 billion from oil and gas in 10 years.
He regretted that the solid minerals sector could only generate N624.1 billion in 13 years.
Orji said: “From the NEITI reports, a total of N624.1billion was recorded as revenue that has accrued to the government from the sector over a 13-year period which, in today’s exchange rate, amounts to about $1.4billion compared to the enormous $394b earned in the oil and gas sector in just 10 years.”
Expressing concern over the low performance of the sector, Orji said it shows negligence to the enormous potential in the solid minerals sector.
He said: “Then the second area that we will also talk about is that we are very displeased that the solid minerals sector currently contributes a little over 1.8 per cent to Nigeria’s GDP.
“This is an enormous sector that can grow the economy more than oil. Our projection is that if the solid mineral sector is thrown open for investment, it has the potential to contribute over 60 per cent to the nation’s GDP. At 60 per cent to Nigeria’s GDP would mean outperforming oil.”
He, however, revealed that NEITI has done an extensive scoping study and identified six strategic minerals for focus, adding that NEITI’s next major focus would be on the development of these strategic minerals.
The Executive Secretary said so far, NEITI has conducted and published 11 cycles of audits in the solid minerals sector, spanning the years 2007 – 2020. (Nation)