The National Orientation Agency says removing the petrol subsidy has averted economic collapse and rescued several Nigerian states from bankruptcy. Director-General of the Agency, Lanre Issa-Onilu shared the details in an editorial for the agency’s weekly publication, highlighting that subsidy payments had consumed more than 70 percent of federal revenue.
Issa-Onilu noted that Nigeria was previously spending nearly all of its income to service debts, with borrowings exceeding 100 trillion naira. The removal of subsidies, he said, has helped government revenue grow from 154 billion naira in early 2023 to 835 billion naira in the first quarter of 2024.
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He also announced that the government has paid off a $3.2 billion IMF debt and settled a $7 billion foreign exchange backlog owed to international airlines. Mr. Issa-Onilu added that Nigeria’s exit from borrowing arrangements, including ways and means advances, has cut its debt service-to-revenue ratio to 68 percent.
In conclusion, Issa-Onilu averred that states are now benefiting from increased inflows, using the funds to pay salaries and reduce their debt levels. He also posted that federal allocations to states and local councils rose from 6.1 trillion naira in 2023 to over 15 trillion naira in 2024, following the final removal of subsidies and deregulation of the downstream sector.
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