President Bola Tinubu on Monday stood by his administration’s decision to remove the fuel subsidy, insisting that the move was necessary for Nigeria’s economic growth and stability.
Speaking with reporters at his Bourdillon residence in Lagos, Tinubu maintained that the reforms introduced by his government were designed to redirect funds toward critical sectors, rather than perpetuating a system he deemed inefficient and corrupt.
According to him, he has no regrets about removing the fuel subsidy, which had led to a huge rise in the pump prices of petroleum products and negatively impacted the costs of goods and services.
The president maintained the reforms introduced by his administration were not intended to inflict pains on Nigerians, but were necessary for growth.
The fuel subsidy in Nigeria has been a contentious issue for decades. Initially introduced in the 1970s to alleviate the impact of rising global oil prices, the subsidy aimed to keep fuel prices affordable for citizens, particularly low-income households.
Over time, however, the subsidy became a significant financial burden on the government, with Nigeria spending over N13 trillion (US$74 billion) on fuel subsidies between 2005 and 2021.
The system was also marred by corruption, inefficiencies, and market distortions.
Key Issues with Fuel Subsidy: Fiscal Burden: The subsidy placed a significant strain on government finances, limiting resources for critical sectors like education, healthcare, and infrastructure development. Corruption and Mismanagement: The system was vulnerable to corruption, with cases of fuel diversion, smuggling, and fraudulent activities. Market Distortions: The subsidy discouraged investment in alternative energy sources and promoted wasteful consumption.
Recent Developments: In May 2023, President Bola Tinubu announced the removal of the fuel subsidy, citing the need to redirect funds toward economic stability and infrastructure development.
This decision sparked concerns about increased living costs, but the government aims to implement measures to mitigate the impact on vulnerable populations.
He also, affirmed that there is no going back on the tax reforms initiated by his administration.The tax reform bills: Nigeria Tax Bill 2024, Nigeria Tax Administration Bill 2024, Joint Revenue Board of Nigeria (Establishment) Bill 2024, and Nigeria Revenue Service (Establishment) Bill 2024 currently before the National Assembly had been opposed by northern leaders who contended that if passed into law would negatively affect revenue accruing to northern states:
He said the reforms were pro-poor and meant to widen the tax net.
Tinubu said the reforms might not be embraced by everybody, but maintained that there was no going back on it.“The tax reform is here to stay.
The reform is pro-poor and it is to widen the tax net, so we can have more people paying. “The hallmark of a good leader is the ability to do what you have to do at the time it ought to be done. Tax matters are subjects of debates and negotiations. I don’t mind cutting edges. I will.”
