How Fuel Subsidy Removal Triples FAAC Allocation Between 2023 And 2024 – Presidency
The removal of the fuel subsidy by President Bola Tinubu’s administration has drastically increased the revenue shared among the federal, state, and local governments, surging from N760 billion in 2023 to N3.2 trillion in 2024.
This revelation was made by Sunday Dare, the Special Adviser on Media and Public Affairs to the President, during an interview on Arise Television’s Prime Time on Thursday night.
According to Dare, Nigeria had been losing $7.5 billion annually due to the subsidy, a loss he described as unsustainable. He emphasized the need for Nigerians to hold state governors accountable for the effective use of the significantly increased revenue now available, stressing that the removal of the subsidy has unlocked resources crucial for human capital development.
“Sometimes, if you refuse to take the stitch you need in time, you have to take many stitches down the road. This country was hemorrhaging,” Dare remarked, underscoring the financial strain the subsidy placed on the nation.
Dare noted that, for over 30 years, successive administrations had avoided removing the subsidy despite its inefficiencies and the corruption it perpetuated. He disclosed that 87 Nigerian companies and individuals had been implicated in subsidy scams that cost the country billions during this period.
“At the point he [President Tinubu] came in, two brakes were necessary. You look at 30 years of this country skirting around subsidy removal. We were hemorrhaging $7.5 billion every year. We had a period in which 87 Nigerian companies and individuals were declared wanted for corruption related to subsidy scams,” he stated.
The removal of the subsidy, Dare explained, has resulted in a monumental increase in the Federation Account Allocation Committee (FAAC) disbursements. In 2023, the total monthly allocation was N760 billion, but by 2024, it had risen to N3.2 trillion.
“The resources that have been freed up for human capital development are significant. In 2023, the FAAC shared N760 billion among the 36 states and the federal government.
“As of 2024, this figure has risen to N3.2 trillion. Now, when it comes to governance, there’s the federal government and the sub-nationals. Every month, these funds are shared. It has tripled for state governments. Without the removal of the subsidy, this increase would not have been possible,” he concluded.
