. To settle N1.7trn debts to GenCos through bonds, promissory notes
. Presidency disowns leaked report
Despite declaring that fuel subsidy was over during his inauguration last year, President Bola Tinubu’s government is set to spend a whopping N5.4 trillion in 2024 on import differentials.
This is according to a draft report of the Accelerated Stabilization and Advancement Plan (ASAP), presented to President Tinubu by the Minister of Finance/Coordinating Minister of the Economy, Wale Edun.
The Minister also said the government plans to settle an outstanding debt of N1.7 trillion owed to Generation Companies (GenCos) within the next 25 days using alternative methods like bonds and promissory notes.
This comes even as the Presidency has disowned the leaked report, saying it remains a proposal and has not yet been approved officially.
However, the N5.4 trillion is a significant increase from the N3.6 trillion allocated by the former Muhammadu Buhari’s administration in 2023.
This revelation has reignited discussions about the government’s subsidy policy, which questions the credibility of the widely touted subsidy removal, and in particular, the transparency and fiscal accountability of Mr. Tinubu’s administration.
Mr Edun noted that fuel subsidy removal is a dynamic process influenced by various factors, adding that the government aims for complete elimination, current strategies focus on transitioning towards alternative energy sources like Compressed Natural Gas (CNG) to mitigate dependency on petrol imports.
Already, the government is projecting to cut up to $4.4 billion from Nigeria’s annual petrol import cost through the adoption of CNG as alternative fuel for vehicles.
GenCos’ debt
The ASAP also said the government will: “Develop and commence implementation of a robust and achievable plan for the resolution of the N1.7 trillion sector liquidity issue by end of June 2024.”
Apart of the plan is for the federal government to pay off its 2023 and 2024 verified obligations to GenCos and GasCos within one to six months.
The document reads further: “Key power sector government stakeholders to work with Honourable Minister of Finance and Coordinating Minister of the Economy; Executive Chairman, Federal Inland Revenue Services (FIRS), and Governor, Central Bank of Nigeria (CBN) to execute alternative settlement methods such as bonds and promissory notes for verified legacy debts,”
None, (two policy documents), is an approved official document of the Federal Government of Nigeria. They are all policy proposals that are still subject to review at the highest level of government. Indeed, one has a ‘draft’ clearly written on it.
Presidency’s position
But denying these details in the report, Special Adviser to the President on Information and Strategy, Bayo Onanuga, in a statement urged the public to disregard them while clarifying the policy proposals.
The statement reads: “The attention of the Presidency has been drawn to two fiscal policy documents in circulation that are being given wide coverage by the mainstream media and social media platforms.
“One of the documents titled Inflation Reduction and Price Stability (Fiscal Policy Measure etc) Order 2024 is being shared as if it were an executive order signed by President Bola Ahmed Tinubu.
The other is a 65-page draft document with the title “Accelerated Stabilisation and Advancement Plan (ASAP), which contains suggestions on how to improve the Nigerian economy. President Tinubu received a copy of the draft on Tuesday.
“We urge the public and the media to disregard the two documents and cease further discussions on them. None is an approved official document of the Federal Government of Nigeria. They are all policy proposals that are still subject to review at the highest level of government. Indeed, one has a ‘draft’ clearly written on it.”
The statement also quoted
Mr. Edun as saying: “It is important to understand that policymaking is an iterative process involving multiple drafts and discussions before any document is finalised.
“We assure the public that the official position on the documents will be made available after comprehensive reviews and approvals are completed.”
“Emanating from the two documents have been reports second-guessing the government’s policy on customs tariffs, fuel subsidy and other economic matters.
“The government wants to restate that its position on fuel subsidy has not changed from what President Bola Ahmed Tinubu declared on 29 May 2023. The fuel subsidy regime has ended. There is no N5.4 trillion being provisioned for it in 2024, as being widely speculated and discussed.
“As previously stated by government officials, including myself, President Tinubu announced the end of the fuel subsidy program last year, and this policy remains firmly in place.
“The Federal Government is committed to mitigating the effects of this removal and easing the cost-of-living pressures on Nigerians.
“Our strategy focuses on addressing key factors such as food inflation, which is significantly impacted by transport costs. With the implementation of our CNG initiative, which aims to displace high PMS and AGO costs, we expect to further reduce these costs.
“Our commitment to ending unproductive subsidies is steadfast, as is our dedication to supporting our most vulnerable populations.”
