The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has thrown it’s weight behind President Bola Ahmed Tinubu on his recent announcement over the removal of fuel subsidy.
The RMAFC Chairman, Mr. Mohammed Bello Shehu, said that the decision which was announced during Tinubu’s inaugural address was long overdue and a major challenge to the country.
Mr Shehu in a statement made available to newsmen, recalled that the Commission has consistently voiced its position on the contentious issue of subsidy removal since the time of late Hamman Tukur, who chaired the Commission during the administration of former President Olusegun Obasanjo.
According to Shehu, the Commission’s stance is based on the understanding that the continued payment of substantial amounts to a privileged few in the name of subsidy severely drains the nation’s limited resources.
This is particularly true as the Nigeria National Petroleum Company Limited (NNPCL), one of the major sources of revenue for the Federation Account, has ceased contributing due to the fuel subsidy regime, which suffers from opacity and other uncertainties.
As one of the fourteen Federal Executive Bodies established by the constitution, specifically section 153 (1)(n) and empowered by paragraph 32 (a) and (c) of part 1 of the Third Schedule of the 1999 Constitution(as amended), RMAFC is constitutionally mandated to monitor the accruals to and disbursement of revenue from the Federation Account.
The Commission also advised the Federal and State Governments on fiscal efficiency and methods to increase their revenue. Mr. Shehu described President Bola Ahmed Tinubu’s pronouncement on the removal of fuel subsidies during his inaugural speech on May 29, 2023, as a significant breakthrough that breaks the longstanding barrier.
He firmly stated that this decision is a step in the right direction, as the country can no longer sustain fuel subsidies, which have more disadvantages than benefits for the citizens. He noted that the NNPCL has not contributed to the Federation Account since January 1, 2022, due to claimed subsidy payments.
The total amount withheld by the NNPCL for this period is reported to be N8,480,204,553,608.13, according to the Office of the Accountant General of the Federation(OAGF), which needs to be reconciled by the RMAFC, OAGF, and NNPCL.
Mr. Shehu emphasized that sustaining phantom subsidy payments while subsidy transaction records are not transparent and crude oil prices are determined globally would be unwise.
This approach he said, hampers the sustainability of the subsidy and negatively impacts critical sectors of the economy.
He further stated that removing fuel subsidies would eliminate the uncertainty surrounding the subsidy regime and free up funds for crucial national development projects, such as providing affordable transportation, investing in the education sector, improving healthcare and infrastructure, and revitalizing domestic refineries to reduce dependence on imported fuel.
The Chairman of the Commission also commended the administration of former President Muhammadu Buhari for creating the necessary environment for the successful launch of the world’s largest private refinery built by Alh. Aliko Dangote, the wealthiest black man.
He expressed his belief that when the refinery becomes operational, the country will experience hassle-free oil production and distribution without the need for a subsidy regime.
While praising President Bola Ahmed Tinubu for his exceptional courage and political will in addressing the issue of fuel subsidy, Mr. Shehu urged the new administration to develop strategies to mitigate the consequences of the new policy.
He also stressed the importance of taking deterrent measures to hold accountable all economic saboteurs who have contributed to the nation’s adversity, in accordance with existing laws.