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Sunday, June 23, 2024

Leaked documents on fiscal policy proposals are not official: Nigerian government

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The Nigerian government said on Thursday that leaked documents on the Nigerian government’s fiscal policy proposals are unofficial.

This was stated by the government in a statement by the Special Adviser to President Bola Tinubu on Information and Strategy, Bayo Onanuga.

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The reaction came amid reports that the government spent N3.6 trillion on subsidies in 2023.

Earlier on Thursday, PREMIUM TIMES reported that a draft of the Accelerated Stabilization and Advancement Plan (ASAP) report presented to President Bola Tinubu by the Minister of Finance and Coordinating Minister of Economy, Wale Edun, on Tuesday said that the fuel subsidy increases. reach N5.4 trillion by the end of 2024.

“At current rates, fuel subsidy spending is projected to reach N5.4 trillion by the end of 2024. This compares unfavorably with N3.6 trillion in 2023 and N2.0 trillion in 2022,” the report says.

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Reaction

But in his reaction, Onanuga said leaked drafts of two fiscal policy documents in circulation that are receiving wide coverage are yet to receive approval as an official document of the federal government of Nigeria.

“The attention of the presidency has been drawn to two fiscal policy documents in circulation that are receiving extensive coverage by major media outlets and social media platforms.

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“One of the documents titled Inflation Reduction and Price Stability (Fiscal Policy Measure, etc.) Order 2024 is being shared as if it were an executive order signed by President Bola Ahmed Tinubu. The other is a 65-page draft titled “Accelerated Stabilization and Advancement Plan (ASAP), which contains suggestions on how to improve the Nigerian economy. President Tinubu received a copy of the draft on Tuesday.

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“We urge the public and the media to ignore the two documents and end discussions about them. None is an official document approved by the federal government of Nigeria. These are all policy proposals that are still subject to review at the highest level of government. In fact, one clearly has ‘draft’ written on it,” Mr. Onanuga said.

Quoting Mr. Edun, he said: “It is important to understand that policy formulation is an iterative process that involves multiple drafts and discussions before any document is finalized.

“We assure the public that the official position on the documents will be available after thorough reviews and approvals are completed.”

According to the statement, reports have emerged from the two documents of questions about the government’s policy on customs duties, fuel subsidies and other economic issues.

“Government wishes to reaffirm that its position on fuel subsidy has not changed from what President Bola Ahmed Tinubu stated on May 29, 2023. The fuel subsidy regime has ended. N5.4 trillion will not be provisioned in 2024 as widely speculated and discussed.

“As previously stated by government officials, including myself, President Tinubu announced the end of the fuel subsidy program last year, and this policy remains firmly in place. The federal government is committed to mitigating the effects of this phase-out and alleviating cost-of-living pressures on Nigerians.

“Our strategy focuses on addressing key factors such as food inflation, which is significantly affected by transportation costs. With the implementation of our Compressed Natural Gas (CNG) initiative, which aims to displace the high costs of premium motor gasoline (PMS) and automotive diesel fuel (AGO), we hope to further reduce these costs. Our commitment to ending unproductive subsidies is firm, as is our dedication to supporting our most vulnerable populations,” Edun said, quoted in the statement.

Onanuga urged the media to always exercise necessary controls and restrictions on the use of documents that do not emanate from official channels so that the public is adequately informed, guided and educated on government policies and programmes.

Background

Tinubu, in his maiden speech on May 29, 2023, announced the removal of the subsidy to alleviate a significant financial burden on the government.

This development has caused hardship to many Nigerians with the resulting increase in prices of goods and services.

Mr Tinubu’s announcement led to an increase in the price of fuel from N197 to between N480 and N570, which immediately led to an increase in transport fares and prices of goods and services in the country.

In July 2023, the price of petrol at the pump was subsequently revised upwards to N617/litre at various Nigerian National Petroleum Company Limited (NNPC Ltd) outlets.

In recent months, there has been speculation that the government had partially reintroduced the petrol subsidy, without prior notice, to keep the price at the pump at N617, given the continued decline in the value of the naira against the dollar and the price of crude oil in the international market.

But the government had repeatedly denied it.

On October 6, 2023, the National President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Festus Osifo, insisted that the Nigerian government had reinstated the petrol subsidy despite the official policy of the government to end the subsidy regime.

Osifo said that due to the cost of crude oil in the international market and the exchange rate, the government still pays subsidies on gasoline.

“The government has to be sincere. In reality, today there is a subsidy because, when the previous price was determined, the price of crude oil on the international market was around $80 per barrel. But today, the price of Brent crude oil has moved to around $93/94 per barrel. So, because it has moved, the price (of gasoline) also had to move,” Osifo said.

In its reaction at the time, NNPC Limited said the Nigerian government had not resumed payment of petrol subsidy.

“No subsidy. We are recovering our full cost from the products we import. We sell to the market and we understand why marketers cannot import,” NNPC Ltd Group Chief Executive Officer Mele Kyari told House of Representatives correspondents after a meeting with the President at the Presidential Villa in Abuja.

“We hope they do it very quickly, and these are some of the interventions that the government is making. “There is no subsidy.”

Again in April, a former governor of Kaduna State, Nasir El-Rufai, said that whether the government admits it or not, the cost of transporting petrol shows that a subsidy of sorts is being paid.

Meanwhile, the International Monetary Fund (IMF), in a report released last month, said the Nigerian government reintroduced the gasoline subsidy late last year.

The IMF said subsidy payments are expected to absorb almost half of Nigeria’s projected oil revenues this year.

The implicit subsidy will cost Africa’s largest crude producer about N8.43 trillion of the projected N17.7 trillion in oil revenues, the IMF said in the report.

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