The removal of the fuel subsidy by President Bola Tinubu’s administration has significantly increased the revenue shared among the federal, state, and local governments, rising from N760 billion in 2023 to N3.2 trillion in 2024.
This was disclosed by Sunday Dare, Special Adviser, Media & Public Affairs to the President, during an interview on Arise Television’s Prime Time on Thursday night.
He said prior to the subsidy removal, Nigeria was losing $7.5 billion annually, a situation he described as unsustainable. He urged Nigerians to hold state governors accountable for the effective utilization of the substantial revenues now available to them, emphasizing that the removal of the subsidy has freed resources for critical human capital development.
Hemorrhaging Resources and the Need for Subsidy Removal
“Sometimes, if you refuse to take the stitch you need in time, you have to take so many stitches down the road. This country was hemorrhaging,” Dare said, highlighting the financial burden the subsidy placed on the nation.
He noted that for over three decades, successive administrations had avoided removing the subsidy despite its inefficiency and corruption-ridden structure.
He pointed out that during this period, 87 Nigerian companies and individuals were implicated in subsidy scams, which cost the country billions.
“At the point he [President Tinubu] came in, two brakes were necessary. You look at 30 years of this country skirting around subsidy removal. We were hemorrhaging $7.5 billion every year. We had a period in which 87 Nigerian companies and individuals were declared wanted for corruption related to subsidy scams,” Dare stated.
Freed-Up Resources and Tripled Allocations
The removal of the subsidy, Dare explained, has resulted in a monumental shift in the Federation Account Allocation Committee (FAAC) disbursements. In 2023, the total monthly allocation stood at N760 billion, but in 2024, it has surged to N3.2 trillion.
“The resources that have been freed up for human capital development, and one part that is really poignant is the fact, in 2023, N760 billion, that was the FAAC that was shared by the 36 states and the federal government.
“As of 2024, that moved up to N3.2 trillion. Now, when it comes to governance, there’s the federal government, there’s the sub-national. Every month, these monies are shared. It has tripled to the state government. So, subsidy has freed up resources. If subsidy was not removed, we would not have it go up to 3.2 trillion,” he maintained.
What you should know
Hope Uzodimma, the governor of Imo State, described the Federal Government’s removal of fuel subsidies as a “direct blessing” to states.
