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Nigeria projected to 50% spend more on fuel subsidies in 2024 – Documents

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Nigeria is projected to spend 5.4 trillion naira ($3.7 billion) in 2024, which is 50% more than in 2023, to maintain fixed petrol prices.

Additionally, the country plans to borrow an extra 6.6 trillion naira to address budget shortfalls.

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The document, titled “Accelerated Stabilisation and Advancement Plan” (ASAP), was developed by the finance ministry in collaboration with private sector executives and economists. Its objective is to tackle challenges associated with reforms aimed at fostering economic growth.

President Bola Tinubu implemented a significant reform last May by eliminating a popular but expensive petrol subsidy, which was hailed by investors as a landmark move to stimulate growth.

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However, this led to a threefold increase in petrol prices, escalated transportation costs, and fueled inflation, prompting discontent among motorists.

Despite facing pressure from labor unions regarding the soaring cost of living resulting from his reforms, Tinubu has remained steadfast in his commitment not to reverse them.

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Since July last year, petrol prices have remained fixed despite two currency devaluations. Nigeria’s reliance on petroleum product imports persists due to minimal production by state-owned refineries.

“At current rates, expenditure on fuel subsidy is projected to reach 5.4 trillion naira by the end of 2024. This compares unfavourably with 3.6 trillion naira in 2023 and 2.0 trillion naira in 2022,” the ministry said in the draft document.


Presidential aide Bayo Onanuga said Tinubu had received the draft on Tuesday, adding that it is still only a proposal containing suggestions on how to improve the Nigerian economy.

However, analysts suggest that if the president endorses the policy, he could initiate the implementation of its recommendations through executive orders. These recommendations encompass strategies for the power, oil and gas, agriculture, and healthcare sectors, with provisions for business support.

Nigeria’s economy has been experiencing sluggish growth, hovering around 3%, which falls significantly short of the 6% annual expansion envisioned by Tinubu upon assuming office last year.

Outlined in the policy document are proposals from the ministry, including the sale of equity in refineries by May 2026, an increase in excise duty on beverages, and the introduction of taxes on single-use plastics and sweetened beverages to generate revenue.

Additionally, the document outlines the government’s objective to achieve oil production of approximately 2 million barrels per day by December, a substantial increase from the current 1.4 million barrels, aimed at bolstering cash flow and bridging revenue shortfalls.

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