Nigerian leaders on spending spree as subsidy removal adds N1trn revenue monthly

THERE are worries over fiscal rascality by political officeholders in Nigeria, as N1 trillion additional monthly revenue accrual from petroleum subsidy removal remains unaccounted for.

Despite being urged by President Bola Tinubu to make sacrifices after the fuel subsidy removal, Nigerians are currently under severe economic pains, with the nation’s currency – the naira – galloping from its free fall to the US dollar despite interventions by the Central Bank of Nigeria.

More Nigerians are poorer and hungrier, as food inflation stands at 31. 52 per cent, and the surge in food prices squeezes an average citizen’s spending.

But the trajectory contrasts sharply with the leaders who many citizens believe show sheer imprudence in utilising national resources – a culture that has stagnated the nation’s progress for decades.

“The danger is that we have the federation allocation improve by N1 trillion monthly, but the benefits are not trickling down to the people. Subsidy removal gains are not impacting the people. Nigerians are going through a lot economically now,” former Director-General of Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, told The ICIR.

“The political authorities need to observe fiscal prudence. What has happened is that those in government have been spending money as if we don’t have a revenue problem. This is bad for our economy,” he added.

Many economists have argued that a bloated federal executive council of 48 cabinet members has become worrisome for an economy that borrows to fund a large chunk of its national budget.

“Should the government be that large at a time when a lean cabinet seems more needful given the financial state of the country?” a political economist, Segun Sowunmi said in response to the development.

The ICIR also reported a huge amount of money expended on the importation and delivery of 360 sports utility vehicles (SUVs) by the House of Representatives worth N57. 6 billion for its members while neglecting indigenous companies and exporting jobs to other advanced economies. The Socio-Economic Rights and Accountability Project (SERAP) has already asked the Federal High Court in Lagos to stop the procurement.

Also, the dust raised by the N5 billion yacht included in the N2.17 trillion supplementary budget, which many had assumed was for the President, has yet to settle, despite borrowing from the World Bank and other multi-lateral lending institutions to fund the budget.

Both at the federal and state, Nigerian leaders have failed to show prudence in fiscal spending with fleets of exotic cars in their convoys, many of which are imported and not sourced from indigenous vehicle manufacturing firms.

Most Nigerian leaders prefer procurement of their utility vehicles to be sourced from imported brands while leaving indigenous firms to struggle.

“I don’t know of any indigenous manufacturing vehicle firm called Nord Automobile limited located in Epe Lagos,” the commissioner for planning and budget, Ope George, said in response to why Lagos would procure fleets of cars without looking towards indigenous vehicle manufacturers.

Commenting on this concern, a development economist, Kalu Aja, argued that Nigeria had a spending problem, not a revenue one.

“The country’s economy is in distress. However, if we get more revenue, it would be spent away by political officeholders taking the largest chunk. Nigeria has a spending problem, not a revenue problem,” he said.

He stressed that something as basic as pipe-borne water was not running in virtually all the local government areas in the country despite huge allocations to states and revenue appreciations.

Last week, The ICIR reported why the minister of finance discouraged further borrowing by the Federal Government at the Medium Term Expenditure Framework (MTEF) defence in Abuja.

He had argued that Nigeria serviced its debts with 98 per cent of its revenue.

Amid these challenges, some Nigerians have been berating some state governments’ fiscal rascality despite 133 million people in multi-dimensional poverty.






     

     

    “A lot is happening in the states that need tracking. The civil society and the media need to pay more attention at the state level. Track the budget and call out frivolous spending and red flags from state governors. The revenue appreciation should not be a reason for frivolous spending,” Lead director of the Centre for Social Justice, Eze Onyekpere, told The ICIR.

    The Minister of Finance, Wale Edun, confirmed that the federation’s account witnessed improved revenue inflow since the subsidy removal from an average of N650 million monthly to over N1 trillion in the last four months.

    Monthly allocations to states by the Federal Government have jumped since the subsidy removal, but the majority of citizens believe they have made no significant impacts on their lives.

    The ICIR reported frivolous spending by the Lagos state government, a concern early raised by Funso Doherty – a former gubernatorial candidate in the state under the platform of Action Democratic Congress (ADC).

    Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.

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