In a recent presidential inauguration lecture, the President of the African Development Bank (AfDB), Dr. Akinwumi Adesina, took a jab at Nigeria’s fuel subsidy regime and the exorbitant cost of governance. With a touch of humor, Adesina argued that fuel subsidies were “killing” Nigeria’s economy and costing a staggering $10 billion in 2022 alone. According to him, it’s time to put an end to this subsidy that primarily benefits the rich, leaving the poor to foot the bill.
Adesina, a former Minister of Agriculture in Nigeria, highlighted that the poorest 40% of the population only consume a mere 3% of petrol. It’s clear that fuel subsidies are draining Nigeria’s economy, forcing the country to borrow excessively. Instead, Adesina suggested redirecting these funds towards national development, emphasizing that Nigeria shouldn’t be borrowing for unnecessary expenses.
The AfDB President proposed a solution to combat high fuel prices: supporting private-sector refineries and modular refineries to enhance efficiency and competitiveness. By reducing dependence on costly crude oil imports, Nigeria could drive down pump prices, benefiting the masses. Adesina commended Africa’s richest man, Aliko Dangote, for investing $19 billion in constructing a refinery, which is set to revolutionize Nigeria’s economy. He also lauded President Muhammadu Buhari’s administration for commissioning the refinery.
Adesina didn’t stop there; he addressed the pressing issue of excessive governance costs in Nigeria. Describing it as “too high,” he called for a drastic reduction to free up resources for development. This reduction could lead to improved rankings on the human capital index, as Nigeria currently falls among countries with the lowest ratings. Adesina advocated for greater reliance on the private sector for infrastructure development, lightening the burden on the Federal Government.
When it comes to tax, Adesina encouraged the Federal Government to shift from tax exemption to tax redemption. He urged authorities to ensure that multinational companies pay appropriate royalties and taxes, while also plugging revenue leakages. Adesina emphasized that increasing tax generation is not enough; the government should deliver quality public services and invest in basic amenities for its citizens. He noted that effective governments create a social contract with their people, delivering results that make a positive impact on their lives.
Dr. Akinwumi Adesina’s humorous yet insightful speech shed light on the pressing issues of fuel subsidies, governance costs, and tax generation in Nigeria. His recommendations to remove fuel subsidies, support private-sector refineries, reduce governance costs, and improve tax collection provide a roadmap for a more economically vibrant and socially responsible Nigeria.
