FG says fuel subsidy hindering debt service, analysts says its high cost of governance

Finance Minister, Zainab Ahmed has resurrected the fuel subsidy issue, saying it is making debt service a herculean task. But analysts quickly disagreed with her, saying the huge cost of governance is grossly responsible for the financial mess the country found its self.

Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed has said the huge amount being spent on payment of fuel subsidy is limiting the ability of the federal government to service it’s over N40 trillion debt burden.

The acting Accountant-General of the Federation (AGF), Mr Chukwuyere Anamekwe agreed with the analysts saying, the huge level of borrowing to buoy budget shortfall and payment of salaries and wages is worrisome.

“We have to borrow to augment payment of salaries and wages. This shows we are in very difficult times. Government income is highly challenged,” he stated.

Nigeria’s debt position worsened in the first quarter of this year as the country’s debt stock rose by N2.04 trillion to hit N41.60 trillion in the first three months of this year.

But analysts who spoke with Blueprint Newspaper countered the minister, saying, the government is actually borrowing to fund governing cost.

Peter Isiekwu, an economist in Lagos said, a sitting senator gets roughly N60 billion monthly as salaries and money meant for constituency projects, but at the end of the day, there are no projects in sight.

Shola Taiwo, a retired banker said, if the monies borrowed by the Federal Government were used for economic projects, returns from the projects would be able to pay the debts in the a while. She lamented that, it is not the case.

Shongule Ogo, a political analysts is very angry that, part of the money borrowed is what the politicians spewed back as cash used in bribing delegates in the last primaries. He said, both the ruling party and the PDP are involved in the matter.

Crude oil prices have risen to a 14 year high, but for one reason or the other Nigeria is not a beneficiary of the windfall.

It is noted that, Nigeria and Libya were the major reason the Organisation of Petroleum Exporting Countries (OPEC) could meet its target.

Not only did OPEC not lift its production as agreed for the month of May, its production actually decreased, according to the Organisation of Petroleum Exporting Countries (OPEC)’s latest Monthly Oil Market Report released on yesterday.

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