Payment of about N210bn fuel subsidy monthly, unsustainable ― El-Rufai tells Governors

Governor Nasir El-Rufai on Thursday disclosed that the payment of between N70 billion and N210 billion monthly on fuel subsidy is unsustainable.

Governor El-Rufai made the observation while presenting the report on the appropriate pricing of Premium Motor Spirit (PMS) otherwise called petrol, during the 30th teleconference meeting of the Nigeria Governors’ Forum (NGF) chaired by Governor Kayode Fayemi.

While calling for full deregulation of the downstream of the petroleum industry, Governor El-Rufai noted that the payment of subsidy ranging from N70 billion to N210 billion monthly to keep the PMS price at N162 per litre is completely unsustainable.

According to the communiqué issued at the end of the teleconference meeting, the Forum also received presentations from the World Bank led by the Country Director for Nigeria, Shubham Chaudhuri, in the company of Prof Foluso Okunmadewa, Sector Leader of the Human Development Team, and Yue Man Lee, Task Team Leader for the States Fiscal Transparency, Accountability, and Sustainability (SFTAS) – Program-for-Results (PforR) on the Nigeria COVID-19 Action Recovery and Economic Stimulus – Program for Results (Nigeria CARES) and SFTAS.

“The World Bank team commended the commitment and actions of State Governors for establishing and resourcing CARES programme State Coordinating Units under their Ministries of Planning, and requested for their additional support in areas such as the adoption of a Fund Release Policy for improved predictability of resources flows to CARES Delivery MDAs; adoption and institutionalization of protocols for reporting, management and investigation of fraud and corruption in MDAs implementing CARES; and the release of 2021 State budgets to MDAs for the commencement of CARES-related activities

“The Bank also urged the support of Governors to ensure that their Ministries of Finance and Ministries of Justice fast track the execution of subsidiary agreements for the CARES programme.”

In the same vein, the Governors received updates on the SFTAS programme which showed that “targets for results and disbursements on the 2018 and 2019 Annual Performance Assessments (APA) and new COVID-19 2020 Disbursement Linked Indicators (DLIs) have been exceeded.

“For the SFTAS 2020 APA and new COVID-19 DLIs, all 36 States are on track to fully meet the Eligibility Criteria of having National Chart of Account (NCOA) compliant FY2021 budget published online by 31 January 2021. (33 States have been confirmed as fully compliant while the remaining 3 States are being reviewed).

“Under the SFTAS Program for Results, 23 States have already passed strong state-level debt legislation which stipulates: responsibilities for contracting state debt; responsibilities for recording/reporting state debt; and state fiscal and debt rules/limits.

“To help Nigeria successfully meet the World Bank Sustainable Debt Financing Policy (SDFP) by strengthening debt management, debt transparency and fiscal responsibility at the state level, a strong collective commitment was made for the remaining 13 States to pass such state-level debt legislation by 31 December 2021.”

In his remarks, NGF SFTAS Programme Lead, Olanrewaju Ajogbasile provided key lessons that have “accounted for the success of performing States in the implementation of the SFTAS programme, including the institutionalization of a steering committee chaired by a very senior government official; high-level monitoring and ownership with regular briefings to the State Governor or State Executive Council; dedicated budget under the Ministry of Finance to support SFTAS operations; an incentivized environment for State government officials working on SFTAS activities; and the provision of basic ICT infrastructure arrangements for focal MDAs to ensure that they are able to access remote technical assistance and meet reform actions in time.”

The Governors also received a presentation from the Honourable Minister for Agriculture and Rural Development, Mohammed Sabo Nanono, on the second phase of farmer enumeration for the Agric for Food and Jobs Plan (AFJP) which is a component of the Nigerian Economic Sustainability Plan (NESP) approved by Mr. President and the Federal Executive Council (FEC) on June 24, 2020.

“The programme is designed to help mitigate the impact of COVID 19 on smallholder farmers and the entire agricultural value chain. The 2nd phase numeration is an extension of the 1st phase targeting the registration of up to 10 million farmers in the AFJP database. 2.4 million smallholder farmers were initially targeted for registration to be provided with input funding to boost food production, with about 30,000 N-power (N-Agro) graduates engaged and trained to carry out the farmer registration,” the communiqué stated.

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