KEY POINTS

• The Federal Government says it will sustain its economic reforms and will not return to subsidy.
• Budget Minister Abubakar Atiku Bagudu says the economy has recorded growth for two consecutive quarters, while inflation and interest rates have declined.
• The government says revenue allocations to federal, state and local governments have increased, with some states and councils recording more than fivefold rises in monthly revenue.
• More than $6 billion has been mobilised from the World Bank and other development partners to support household resilience and economic opportunities, according to the minister.

MAIN STORY

The Federal Government has ruled out a return to subsidy, saying it will continue its economic reforms while adjusting policies to tackle poverty, create jobs and improve living standards.

Minister of Budget and Economic Planning, Senator Abubakar Atiku Bagudu, stated this on Monday in Abuja at the 32nd Nigerian Economic Summit, themed “Growth That Works: Delivering Jobs, Productivity and Shared Prosperity.”

“There will be no return to subsidy. We recognise the need to calibrate and do better,” Bagudu said.

He said the reforms were intended to stabilise the economy, improve productivity, expand domestic production and create more employment opportunities. He added that the government would continue investing in infrastructure while strengthening efforts to reduce poverty.

According to the minister, Nigeria’s economy has recorded positive growth for two consecutive quarters, while inflation and interest rates have been declining. He also said revenue allocations to the three tiers of government had increased, with some states and local governments recording more than fivefold increases in monthly revenue.

Bagudu attributed the higher allocations to the distribution of revenue among the federal, state and local governments to support their constitutional responsibilities.

The minister said the government was targeting a $1 trillion economy, adding that achieving the ambition would require sustained economic growth and wider participation in productive activities.

He said President Bola Tinubu had challenged the administration to build an economy that includes more Nigerians and generates broader prosperity.

Bagudu also stressed the need for cooperation among federal, state and local governments to coordinate fiscal and monetary policies and improve spending on security and infrastructure.

He said the government was prioritising development at the grassroots, skills acquisition, early childhood development and support for small and medium-sized enterprises.

The minister further disclosed that more than $6 billion had been mobilised from the World Bank and other development partners to strengthen household resilience and expand economic opportunities.

He identified improvements in agricultural productivity and support for domestic production as important to creating jobs, increasing incomes and improving livelihoods.

Bagudu said private businesses would be central to the government’s economic ambitions, noting that investors needed confidence in the economy to expand operations, improve productivity and employ more workers.

He reaffirmed the administration’s commitment to continuing the reforms while adjusting policies to improve economic outcomes.

“We are staying the course,” Bagudu said, urging Nigerians to recognise the progress recorded so far and support efforts to sustain the reforms.

THE ISSUES

The government’s decision to rule out a return to subsidy signals its intention to maintain the current direction of economic policy. However, sustaining the reforms will also require measures that help households and businesses cope with their effects.

For households, the cost of transport, food and other essentials remains important when assessing whether economic improvements are translating into better living conditions. Lower inflation means prices are rising more slowly, but it does not necessarily mean that prices have fallen or that goods have become affordable again.

For businesses, the government’s emphasis on domestic production, infrastructure and investor confidence points to the need to reduce the cost of operating in Nigeria. Reliable electricity, transport infrastructure, access to finance and predictable policies can influence whether companies invest, expand and employ more people.

Higher revenue allocations could give states and local governments more resources to provide services and invest in development. Their impact on residents, however, will depend on how the funds are spent and whether they improve public services, infrastructure and economic opportunities.

The $1 trillion economy target also depends on growth that creates productive jobs and raises incomes, rather than an increase in the overall size of the economy alone.

WHAT’S BEING SAID

• “There will be no return to subsidy. We recognise the need to calibrate and do better.” – Senator Abubakar Atiku Bagudu, Minister of Budget and Economic Planning.
• “We are staying the course,” – Senator Abubakar Atiku Bagudu.

WHAT’S NEXT

The Federal Government says it will continue implementing its reforms while adjusting policies to address poverty and improve economic outcomes. Its stated priorities include domestic production, infrastructure, agricultural productivity, skills development and support for small and medium-sized businesses.

The next test will be whether these measures translate into stronger business activity, more jobs, improved household incomes and better access to essential services. The government’s progress towards its $1 trillion economy target will also depend on sustained growth and broader participation in productive activities.

BOTTOM LINE

The Federal Government is maintaining its position against restoring subsidy, arguing that continued reforms are necessary to strengthen the economy. The central challenge is ensuring that economic growth, increased public revenue and investment lead to tangible improvements in the lives of Nigerians.

Source: NAN