The Federal Government has saved N1.83 trillion less than three months after it stopped the payment of subsidy on petrol, The Nation has learnt.
The savings were made from revenue that accrued into the federation account in June and July.
A source within the Federation Account Allocation Committee (FAAC) confirmed to our reporter that the amount was saved in the federation account “first as a fall back (augmentation) for a rainy day”.
The source said that N1, 051,946,000,000 was saved in from the N1.97 trillion revenue generated in June. Additional N779,890,000,000 was saved from the N1.746 trillion revenue raked in last month.
According to the source, the Minister of Finance and Coordinating Minister for the Economy (CME), Mr. Wale Edun, has briefed the heads of revenue generating agencies on what the government plans to do with the savings.
The CME said the Bola Ahmed Tinubu administration a plans to save money to execute projects without relying on borrowing.
On Sunday, President Tinubu told his hosts at the opening of the 63rd Nigerian Bar Association (NBA) annual conference that the country can no longer continue to serve national debts with 90 per cent of its revenue.
Also at the inaugural Federal Executive Council (FEC) meeting yesterday, the President told his ministers that his administration will rather create a stable macroeconomic environment than borrowing more money to implement projects.
The CME has since communicated the President’s position to FAAC members and the revenue generating agencies.
The N1.831 trillion saving from the FAAC revenue, the official said, is domiciled in the federation account with the Central Bank of Nigeria (CBN).
It was learnt that the federal government has been able “to convince most FAAC members of the need to save from the revenue that will accrue to the Federation Account with the understanding that what will be shared amongst all the beneficiaries of the Federation Account will not go below a certain threshold”.
“In the event that what is available for sharing in any particular month is below the agreed threshold, then FAAC will be at liberty to withdraw from the savings to augment for the month”, the source explained.
It said the Federation Account was able to garner trillions of naira in two months following the government’s decision to stop subsidizing petrol.
During last Wednesday’s inauguration of ministers in Abuja, Tinubu affirmed his unwavering dedication to ending the destructive pattern of heavily relying on loans to finance public spending.
Acknowledged the hindrance of such reliance to prudent management of government’s limited revenue, the president said loan servicing obligations consume significant portions of these funds.
His commitment, he explained is to find alternative solutions to reduce borrowing for public spending and ensure a more sustainable fiscal plan for Nigeria.
Briefing reporters at the State House after the maiden FEC meeting, Edun stated that the removal of petrol subsidy and exchange rate harmonisation does not signify any plans to obtain funds from local or foreign institutions through borrowing.
Instead, the subsidy removal he said will be utilised to enhance government revenue and facilitate a favorable business climate for local and foreign investment across diverse sectors.
Edun stated that following the removal of petrol subsidy, there has been a surge in revenue, and the government has put in place several assistance options to ease the impact of the decision in the short, medium, and long term.
He emphasized the government’s commitment, led by the President to revive the economy from its current state.
Elumelu: govt’s bold decisions in Nigerians’ interest
Yesterday, private sector operators hailed the President for his decisions on the country’s economy.
Their position was conveyed by the Chairman of HEIRS Holdings and Transcorp Plc, Mr. Tony Elumelu, after a private meeting with President Tinubu at the Presidential Villa, Abuja.
Elumelu acknowledged that the President had taken good decisions in the interest of the country, said the private sector had been encouraged by the steps taken so far.
Tinubu, he noted, has so far taken such decisions in the interest of all Nigerians, especially women and the youths, saying that in the long run, Nigeria will benefit from it all, imploring citizens to be patient with the President.
He said: “The private sector is encouraged with the bold decisions President Bola Ahmed Tinubu has taken and we hope that in the fullness of time, Nigerians will benefit from it because it’s all about the Nigerian people, it’s all about our youths, it’s all about making sure our women are involved and empowered.
“It’s all about making sure our youths get jobs and I think Mr President has this at the back of his mind and I believe, as a private sector person, that the actions and the decisions the President is taking now will help our people in the long run.
He appealed to Nigerians to be more patience with the President and the ongoing process, saying “a bit of patience, you know Rome was not built in a day”.