- The Federal Government has said the fuel subsidy removal tripled Federation Account Allocation Committee to N3.2 trillion in 2024
- It said Nigeria was losing resources to subsidy payments
- The Federal Government said Nigerians should hold state governments accountable for the efficient utilisation of revenue
The Federal Government disclosed that the removal of the fuel subsidy by President Bola Tinubu in May 2023 tripled the revenue shared among the federal, state, and local governments, which rose from N760 billion in 2023 to N3.2 trillion in 2024.
The Special Adviser, Media & Public Affairs to the President, Sunday Dare, stated this during an interview on Arise Television on Thursday, January 16.
Dare said before the removal of fuel subsidies, Nigeria was losing $7.5 billion annually, which he said was unsustainable.
He added that with the increase in Federation Account Allocation Committee (FAAC) allocation to states, Nigerians should hold governors accountable for the effective utilisation of the available revenues.
Dare said, “The resources that have been freed up for human capital development, and one part that is really poignant is the fact, in 2023, N760 billion, that was the FAAC that was shared by the 36 states and the Federal Government.
“As of 2024, that moved up to N3.2 trillion. Now, when it comes to governance, there’s the Federal Government, there’s the sub-national. Every month, these monies are shared. It has tripled to the state government. So, subsidy has freed up resources. If subsidy was not removed, we would not have it go up to 3.2 trillion.”
Nigeria lost resources to fuel subsidy
The president’s aide added that before the removal of fuel subsidy, Nigeria lost resources to subsidy scams, which he said strained the country’s finances.
He also noted that successive administrations avoided removing the subsidy for 30 years despite its efficiency and the $7.5 billion lost yearly.
Dare said, “Sometimes, if you refuse to take the stitch you need in time, you have to take so many stitches down the road. This country was hemorrhaging.
“At the point he (President Tinubu) came in, two brakes were necessary. You look at 30 years of this country skirting around subsidy removal.
“We were hemorrhaging $7.5 billion every year. We had a period in which 87 Nigerian companies and individuals were declared wanted for corruption related to subsidy scams.”
FAAC shared N1.7 trillion in November 2024
In November 2024, a total of N1.727 trillion was shared among the federal, states, and local governments as FAAC revenue.
The N1.727 trillion total distributable revenue comprised statutory revenue of N455.354 billion.
The November FAAC revenue was an increase from the N1.411 trillion shared as October 2024 FAAC revenue.
The October FAAC revenue comprised distributable statutory revenue of N206.319 billion, distributable Value Added Tax (VAT) revenue of N622.312 billion, Electronic Money Transfer Levy (EMTL) revenue of N17.111 billion and Exchange Difference revenue of N566.000 billion.
No regrets over subsidy removal, tax reforms will proceed, Tinubu says
Meanwhile, TheRadar earlier reported that President Bola Tinubu said there is no turning back on his administration’s tax reform plans and subsidy removal, which have sparked significant controversy across the country.
Speaking during a media chat in Lagos on Monday, December 23, Tinubu stressed that the reforms were necessary to eliminate colonial-era assumptions in Nigeria's tax system and were part of his broader economic agenda.
