The Federal Government has spent about N2.3 trillion as subsidies on petrol and power consumption between 2015 and 2018. This is according to a report by PricewaterhouseCoopers (PwC), a global accounting and consulting firm.
The report has it that the President Muhammadu Buhari-led administration spent N1.12 trillion as electricity subsidy and another N1.2 trillion on petrol subsidy within a period of three years.
[READ MORE: NNPC spends estimated N33.60/litre on petrol subsidy]
According to the report, the highlighted subsidy expenditures within the reviewed period represent 17% of the country’s current foreign reserves and 26% of the 2019 federal budget.
The report PwC report, which was presented to power sector stakeholders at a roundtable organised by Mainstream Energy Solutions-operators of the Kainji and Jebba hydropower generation companies (Gencos), by the Chief Economist of PwC Nigeria, Dr. Andrew Nevin, also has it that the total electricity subsidy for the period alone could cover the current budget of the ministries of health and education.
The report read partly: “The Federal Government has expended about N1.2 trillion as petroleum subsidy over the past four years (2015-2018). The tariff shortfall in the electricity sector which technically is the electricity subsidy payable by the federal government stood at N1.12 trillion between 2015 and 2018.
“Both subsidies amount to N2.3 trillion, which represents about 17 per cent of current foreign reserves and 26 per cent of the 2019 budget.
Is subsidy payment healthy for the economy? Fuel subsidy in Nigeria has been a subject of discussion among the stakeholders of the country’s economy. In what appears to be another attempt to save the country’s economy which presently bites, the International Monetary Fund (IMF) had reiterated the need for Nigeria and other countries that still retain the policy of subsiding fuel consumption to put an end to the policy.
In a blog post titled, “Fuel for Thought: Ditch the Subsidies”, the IMF made known that the fuel subsidy which some countries pay as an attempt to reduce the price of fuel for consumers, typically benefits the rich more than the poor.