Dr. Akinwumi Adesina, president of the African Development Bank (AfDB), has questioned Nigeria’s fuel subsidy system and the high cost of governance.
Adesina claimed that the continuing subsidisation of petroleum goods was destroying the Nigerian economy while delivering a speech at the presidential inaugural lecture on Saturday in Abuja.
He claimed that in 2022, fuel subsidies alone cost the continent’s most populated country’s GDP around $10 billion.
He argued that Nigeria was continually borrowing money for purposes for which it shouldn’t be doing so and suggested that this money be used for national development instead.
Adesina, a former Minister of Agriculture in Nigeria, therefore, called for the removal of fuel subsidy, saying it only benefits the rich at the expense of the majority poor Nigerians.
“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 per cent of the population consume just three per cent 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,” Prof. Adesina stated.
Adesina also counselled the Federal Government to improve tax revenue collection in the nation when discussing the tax drive.
He urged the government, in particular, to switch from tax exemption to tax redemption and make sure multinational corporations pay the proper royalties and taxes. Additionally, he wants tax leakages in revenue collection to be stopped by Nigerian authorities.
The head of the AfDB urges the Nigerian government to give the people with the necessities, noting that simply hiking taxes is insufficient.
“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,” Adesina added.
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