The Minister of Budget and Economic Planning, Atiku Bagudu, has defended the economic reforms of President Tinubu as well as the removal of fuel subsidy.
This was published as an article published in Volume 28 of The Explainer, a weekly publication by the National Orientation Agency, on Friday, 27th September 2024, Bagudu pointed out when the issue of fuel subsidy is always discussed important facts are neglected, one of which is that prices for diesel and kerosene have already been deregulated, while petrol remains relatively cheaper.
Bagudu emphasised the importance of transitioning to Compressed Natural Gas as a more affordable energy source, especially for transportation.
“The President addressed the fuel subsidy issue and the debate surrounding CNG adoption. While this transition may cause temporary shocks, particularly for vulnerable groups, with the right measures in place, we can build a more competitive energy sector that will drive growth,” Bagudu stated.
Bagudu said the president’s strategy focuses on confronting difficult realities while establishing the foundation for long-term growth.
“Our economy is currently small. The federal budget is approximately $20 billion. When compared to countries with similar populations, such as Indonesia, with a federal budget of $213 billion, or Brazil, with $750 billion, it becomes evident that we cannot achieve our economic objectives if we continue on this path. Our revenue must be higher.
“The clearest sign of this is seen in the monthly federal allocation meetings, where we distribute less than $2 billion across the three tiers of government. Even with this, the total is only $24 billion annually, which is insufficient. State governments that depend heavily on this allocation are under severe strain,” Bagudu explained.
He highlighted Tinubu’s goal of transforming Nigeria into a $1 trillion economy, noting that tough decisions will be taken to achieve this.
He added, “A key focus area is managing our foreign exchange. We do not have enough foreign currency reserves, so it is essential for the Central Bank to operate independently.
“The President supports this, following the examples of other nations that have faced similar challenges. A market-based system, rather than one that selects winners and losers, will attract more revenue and help stabilise the exchange rate.”
He praised Tinubu’s vision of empowering young people through a 3-million-youth training programme in areas like automation, artificial intelligence, and robotics. He also underscored the administration’s support for agriculture, SMEs, and microcredit schemes to revitalise domestic economic activity.
“The recent oversubscription of the dollar bond by $900 million reflects growing confidence in our economy. Rating agencies have also given favourable evaluations.
“In international interactions, we receive commendations for the steps being taken, as these measures have spurred growth in other countries. Even in Saudi Arabia, officials have expressed their support for the President’s initiatives, praising his focus on economic reforms,” Bagudu said.
THE PUNCH NEWSPAPER
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