Lagos Chamber of Commerce and Industry, LCCI, has described fuel subsidy which the World Bank said cost Nigeria N731 billion in 2018, as the biggest fiscal burden currently staring the nation’s economy in the face. LCCI, which response was based on the World Bank report.
The report released on Monday in Abuja which focussed on key developments in Nigeria’s economy in 2018, added among other things that the Excess Crude Account, ECA, was virtually depleted during the period.
In November 2018, the bank had also stated in another report entitled: ‘Nigeria Bi-annual Economic Update for Fall 2018,’ that petrol subsidy deductions for 2017 full year was N107.3 billion, but its current report showed that N731 billion was spent in 2018 alone.
It had stated that most of the petrol volumes Nigeria spent money to subsidise in 2018 were inflated as daily consumption rose to 54 million litres per day (ml/d) from 40ml/d in 2017, ostensibly due partly to out-smuggling.
But Director General, LCCI, Mr. Muda Yusuf, said: “Perhaps the biggest fiscal burden on the economy today is the petroleum subsidy regime. It is a big hole in the finances of government. It puts tremendous pressure on the foreign reserves and the foreign exchange market, just as it exerts immense stress on the nation’s treasury.