Nigeria must channel the money being spent on subsidies to the development of primary healthcare and basic infrastructure to secure the future of Nigeria, experts said at the 27th National Economic Summit (NES27), Tuesday.
“This year, Nigeria is on track to spend N3 trillion on petrol subsidy, which is more than it spends on health. I think the urgency of doing something now is because time is going in terms of retaining the hope of young Nigerians in the future and potential of Nigeria,” Shubham Chaudhuri, the World Bank country director for Nigeria said at the summit.
Chaudhuri said he heard that in six months from now, perhaps with the Petroleum Industry Act (PIA) coming into effect, this will go away. “But the fact is, can Nigeria even afford to wait for those six months? And there is a choice: N3 trillion to petrol subsidy is depriving states of much-needed revenues to invest in basic services,” he said.
Between January and August, a total of N905.27 billion has been incurred as subsidy cost, according to presentations to Federation Account and Allocation Committee (FAAC) meetings seen by BusinessDay.
According to the document, Africa’s biggest economy incurred a subsidy cost of N60.40 billion in February, N111.97 billion in March, N126.30 billion in April, and N114.34 billion in May. The subsidy cost rose from N143.29 billion in June to N175.32 billion in July, but fell to N149.28 billion in August, according to Nigerian National Petroleum Corporation’s (NNPC) records.
However, Zainab Ahmed, minister of finance, budget and national planning, while speaking at a session at the summit, said the Nigerian government had made provision for petrol subsidy till the end of June 2022.
“In our 2022 budget, we only factored in subsidies for the first half of the year; in the second half of the year, we are looking at complete deregulation of the sector, saving foreign exchange and potentially earning more from the oil and gas industry,” she said.
While Nigeria is spending billions on fuel subsidies, crucial sectors of the economy like the educational and health sectors are grossly underdeveloped.
Already, Nigeria has the highest out-of-school children in the World. At 13.5 million, one in five of the world’s out-of-school children are Nigerian.
The World Health Organisation (WHO) has recommended one doctor per 600 people in every country, but at one doctor per 5,000 people Nigeria has one of the lowest doctor-patient ratios in the world.
Nigerians also have one of the lowest life expectancy rates in the world at 54.81 years.
“Forget the noise, where are we spending our money. We spend more on debt service, fuel subsidy, overheads on the National Assembly and not education, healthcare that countries like Ghana and Rwanda are spending,” Muhammadu Sanusi, former governor, Central Bank of Nigeria, and 14th Emir of Kano, said.
Nigeria must spend its resources on critical sectors of the economy such as health and education to drive growth, secure the future of Nigerians and attain the Sustainable Development Goals (SDGs), Sanusi said.
“If we do not as a nation, at the level of leadership understand that development is about human beings; everything we are doing will come back and hurt us,” he stated.
“So long as our spending sends the wrong signals and the bulk of our resources are going to the wrong areas, we are not going to reach the goals of the SDGs,” he said.
According to a 2021 Sustainable Development Report, Nigeria ranked 160 out of the 165 countries on the SDGs’ index.
The country needs to build a national consensus and the consciousness has to be at the top, the governorship and legislators have to agree, he said, stressing Nigeria needs to focus on education, health, and other critical developmental sectors of the economy.
“We need a mind change. It is something that the states need to exist. For those poor people, whoever is sitting on the governor seat or the state should think of those people first.”
On his part, Kayode Fayemi, governor, Ekiti State, stated that the education of the populace was vital to achieving human capital development, “In quality education, I mean the quality of the infrastructure, learning environments, teachers’ quality, quality of education managers and funding.”
“Education is more than going to school, it is about the quality of education, it is about how teachers teach and how they motivate the children,” Godwin Obaseki, the Edo State governor, said.
Obaseki explained that technology would play a key role in improving the quality of education and helping Nigeria achieve its SDG targets.
Similarly, Benjamin Piper, senior director, Africa Education for RTI International, said Nigeria must focus on improving its structural methods and effective skills and training for teachers.
“In sub-Saharan African countries, only 10 percent understand what they read by the end of grade three compared to the United States where over 90 percent of school students understand what they read by grade three,” Piper said.