May 27, (THEWILL) – President of the African Development Bank (AfDB), Akinwumi Adesina, has cautioned the incoming administration of Bola Ahmed Tinubu, against retaining the current fuel subsidy regime.
Speaking on Saturday, at the Inauguration lecture organised by the Presidential Transition Council (PTC), in Abuja. Adesina said payment of subsidy on petroleum products by the Government, is draining the Nigerian economy, adding that in 2022 alone, fuel subsidy costs the economy about $10bn.
Setting the agenda for the incoming Administration of Bola Tinubu, Adesina said, “The place to start therefore is to remove the inefficient fuel subsidy.
“Nigeria’s fuel subsidies benefit the rich, not the poor, fuelling theirs and the government’s endless fleet of cars at the expense of the poor. Estimates show that the poorest 40 percent of the population consume just three percent of petrol.
“Fuel subsidies are killing the Nigerian economy, costing the economy of Nigeria $10 billion in 2022. That means that Nigeria is borrowing what it doesn’t have to borrow.”
Rather than spending billions on crude oil, the AfDB boss called on the Federal Government of Nigeria to support private-sector refineries as well as modular refineries for efficiency and competitiveness.
According to him, the move was necessary to drive down the pump prices of petroleum products.
Adesina commended Aliko Dangote, for investing $19 billion to construct a refinery in the country. He said the project will revolutionise Nigeria’s economy. He also commended President Muhammadu Buhari’s administration for commissioning the refinery.
Speaking on the high cost of governance in the country, Adesina said it should be “drastically reduced to free up more resources for development”.
Adesina said Nigeria spends very little on development, which may be responsible for being ranked among the countries with the lowest human capital index globally.
He canvassed for a change in the current statistics, urging the Nigerian authorities to rely more on the private sector for infrastructure development to reduce the burdens of the Federal Government.
On the tax drive, Adesina advised the Federal Government to increase the tax generation in the country and as well, block tax leakages in revenue collection.
He charged the government to move from tax exemption to tax redemption and also ensure that multinational companies pay appropriate royalties and taxes.
“Nigerians therefore today pay the highest implicit taxes in the world. The government needs to ensure an effective social contract by delivering quality public service.
“It is not the amount collected, it is how it is spent and what is delivered. Nations that grow better run effective governments that assure social contract with their citizens”, he added.
