The Presidency has pushed back against former Vice President Atiku Abubakar’s criticism of the petrol subsidy removal, insisting that one of the biggest achievements of the policy has been the sharp increase in revenue allocations to states and local government councils across Nigeria.
The response came in a statement issued on Sunday by Bayo Onanuga, Special Adviser to President Bola Tinubu on Information and Strategy, following Atiku’s demand for a detailed explanation of how the savings from the subsidy removal have been spent.
Atiku had argued that Nigerians deserve full transparency regarding the subsidy savings, dismissing claims that the funds are being used to improve workers’ welfare.
His comments followed recent remarks by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, who disclosed that the Federal Government would soon publish a comprehensive breakdown of how the subsidy savings have been utilised.
According to Oyedele, a significant portion of the funds has gone into settling obligations previously financed through the Central Bank of Nigeria, servicing rising debt costs following tighter monetary policies, and implementing the new national minimum wage.
Responding to Atiku’s criticism, Onanuga said the decision to remove the petrol subsidy was long overdue, noting that several international financial institutions had repeatedly advised Nigeria to end the subsidy regime because of its huge cost to the economy.
He argued that previous administrations, including the government in which Atiku served as vice president between 1999 and 2007, failed to take the difficult decision.
“It must be said that the government in which Alhaji Atiku was Vice President waded through that toxic phenomenon, and never did the needful,” Onanuga stated.
The presidential spokesman praised the Tinubu administration for ending what he described as a long-standing financial burden on the country.
“The current administration deserves commendation for being able to get rid of something that has become a lodestone around the neck of our collective patrimony,” he said.
According to Onanuga, the most obvious result of the policy has been the increase in allocations shared through the Federation Account Allocation Committee (FAAC).
“The visible consequence of subsidy removal has been the sharp improvement in revenues accruing to states and local governments through the Federation Account,” he said.
He explained that the increased allocations have given state governments more financial flexibility, allowing many of them to invest more in roads, schools, hospitals, salary payments, pensions and social intervention programmes.
Onanuga also cited independent assessments, including those from the World Bank, which he said had acknowledged improvements in public revenue and capital spending at the subnational level following Nigeria’s fiscal reforms.
He argued that President Tinubu’s reforms have shifted greater responsibility for development to state and local governments while ensuring they have more resources to deliver projects.
“This means that President Tinubu has tactically placed more responsibility for socioeconomic development on states and local governments, while providing requisite funding,” Onanuga said.
Describing the development as a step towards genuine fiscal federalism, he added:
“This is true federalism and a bold statement on the much-vaunted subject of economic restructuring—another important issue gallantly avoided by the government in which Alhaji Atiku served and wielded great influence.”
President Bola Tinubu announced the removal of petrol subsidy during his inauguration on May 29, 2023, describing the policy as a necessary economic reform aimed at reducing wasteful government spending and freeing up resources for national development.
The policy has remained one of the most debated decisions of the Tinubu administration, with supporters citing increased government revenue and fiscal reforms, while critics continue to demand greater transparency on how the savings have been utilised.
