Mr. Wale Edun, the Minister of Finance, Budget, and National Planning, revealed on Friday that the sum of N2 billion has been disbursed to states as part of an N5 billion fund allocated to alleviate the economic impact of subsidy removal and the naira float policy.
Edun clarified that this financial support is a combination of a loan and grant, although he did not specify the exact breakdown of these components. The rationale behind releasing only N2 billion at this stage was to prevent a sudden surge in inflation that could result from releasing the entire N5 billion at once.
Speaking at a media briefing in Abuja, Minister Edun emphasized that this installment-based approach was a calculated effort to maintain economic stability and avoid further inflationary pressures. He highlighted the government’s commitment to delivering a better life for Nigerians by promoting investments that enhance productivity, stimulate economic growth, create job opportunities, and reduce poverty.
Notably, the finance minister pointed out that oil revenue is on the rise, with high prices and increased production, factors contributing to the positive economic outlook. In this context, he stressed the essential role of state governments in driving economic growth.
Mr. Mele Kyari, the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), also commended President Tinubu for the prompt removal of petrol subsidies, which prevented the company from financial distress. Kyari further praised the president’s efforts in reforming the security framework in oil-producing regions, resulting in a significant boost in oil production to 1.67 million barrels per day, including condensate.
Additionally, Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, advocated for a reduction in tax incentives and rebates, which currently amount to N6 trillion annually. He suggested that the highest tax concessions should not exceed N2 trillion, emphasizing the need for Nigeria to receive commensurate value from these significant tax incentives. Oyedele also highlighted the potential for Nigeria to generate N20 trillion in annual tax revenue if tax compliance improves.
This update underscores the government’s commitment to managing economic transitions effectively while seeking to enhance tax revenue and economic prosperity.