Economy
Subsidy: FG may spend N236bn monthly on imported, Dangote petrol
The Federal Government may spend about N236 billion monthly to subsidise the Premium Motor Spirit, popularly called petrol, that is imported through the Nigerian National Petroleum Company and the one that is solely off-taken by NNPC from the Dangote Petroleum Refinery.
On Monday, the President and Chief Executive of Dangote Group, Alhaji Aliko Dangote, called on the Federal Government to end fuel subsidies completely.
He said the removal would help determine the actual petrol consumption in the country, as his position received backing from the Independent Petroleum Marketers Association of Nigeria and the Centre for Promotion of Public Enterprise on Tuesday.
This came as it was gathered that members of the Major Energies Marketers Association of Nigeria had lifted over 50 million litres of PMS from the Dangote refinery in the past week.
Based on the revelations by major oil marketers on the cost of Dangote petrol sold to them by NNPC, the price at which NNPC got the product from Dangote, it was established that the product was being subsidised by the government through the national oil firm.
Major oil marketers stated that the product was sold to them by NNPC at N766/litre, whereas NNPC had earlier said that it got the commodity at N898/litre from the Dangote refinery.
This implies that the company subsidised the commodity by N132/litre to the marketers.
Dangote commenced the release of PMS into the domestic market on September 15, 2024, and stated that it would be pumping out 25 million litres of petrol to the Nigerian market daily.
This means that the NNPC is shouldering a subsidy of about N3.3bn daily, while in 30 days it may spend N99bn to subsidise Dangote petrol to marketers.
For imported petrol, though there are various figures on the actual volume of PMS consumed in Nigeria, the most recent figure released by the Nigerian Midstream and Downstream Petroleum Regulatory Authority put the figure at about 45.7 million litres daily.
This means that should the Dangote refinery provide 25 million litres daily, the volume of imported petrol required to meet the domestic demand would be about 20.7 million litres.
In July this year, the Major Energies Marketers Association of Nigeria revealed that the landing cost of imported PMS was N1,117/litre. The landing cost is simply the price at which the commodity lands on Nigeria’s shores.
Dealers in the sector stated on Tuesday that the landing cost of the commodity was still around the figure reported in July.
Independent marketers revealed that NNPC now sells petrol to IPMAN members at N895/litre.
The IPMAN National Publicity Secretary, Chief Chinedu Ukadike, said, “NNPC has started supplying us using the new price template of N895/litre,” he stated while expressing the need for an open market of a willing buyer and willing seller.
Before the release of PMS to the Domestic market by Dangote, NNPC was the sole importer of petrol into Nigeria, as other marketers stopped importing the product due to concerns around accessing foreign exchange.
However, some major marketers have commenced the importation of the commodity.
With the landing cost of imported petrol at N1,117/litre and a price of N895/litre sold to independent marketers by NNPC, it means the company is subsiding the product by N222/litre.
For 20.7 million litres, the national oil firm would pay N4.59bn daily and N137.86bn in 30 days.
A summation of the estimated N99bn subsidy on Dangote petrol and the N137.86bn subsidy on imported petrol means that the government through NNPC may spend about N236.86bn monthly as subsidy on PMS.
But Aliko Dangote in his interview in New York on Monday called for the complete halt of subsidy.
He said, “Subsidy is a very sensitive issue. Once you are subsidising something then people will bloat the price and then the government will end up paying what they are not supposed to be paying. It is the right time to get rid of subsidies.”
“But this refinery will resolve a lot of issues out there, you know, it will show the real consumption of Nigeria, because, you know, nobody can tell you. Some people say 60 million litres of gasoline per day.”
PMS consumption
Nigeria’s PMS consumption has been a topic of debate due to conflicting figures from different agencies. According to the NNPC, the average daily consumption in the first quarter of 2022 was approximately 64.14 million litres. Meanwhile, the Nigerian Midstream and Downstream Petroleum Regulatory Authority reported an average daily consumption of 66.8 million litres in September 2022.
However, following the petrol subsidy removal in May 2023, daily consumption significantly dropped. In May, the average daily consumption was 69.54 million litres, which decreased to 49.48 million litres in June, representing a 28.3 per cent drop. By July, the average daily consumption had further decreased to 45.74 million litres, marking a 34.61 per cent drop from the May figures.
It’s worth noting that the significant decrease in consumption after the subsidy removal raises questions about whether the reduction represents a genuine decrease in PMS consumption or a decrease in smuggling to neighboring countries, estimated to be around 15.6 million liters daily.
N766/litre to marketers
On September 16, 2024, a major marketer of PMS said major marketers got petrol from NNPC at N766/litre, stressing that some dealers would start loading the product allocated to them by NNPC from Dangote refinery. This has since commenced.
“When NNPC gives marketers allocation, they (marketers) will simply go to Dangote to pick up. The payment will be to NNPC, while NNPC in turn pays to Dangote,” the source, who spoke on condition of anonymity because he was not authorised to speak on the matter, stated.
The official added, “NNPC sells to marketers at N766/litre, NNPC buys from Dangote at N898/litre. Marketers are supposed to mobilise their trucks to Dangote, pick up products, and then take them to their stations. The cost of transporting, fees, and other logistics will be borne by the marketers.”
On September 19, 2024, it was reported that 11plc, Total Energies, AA Rano, and other marketers had begun lifting Dangote petrol from NNPC Trading Limited at the rate of N765.99/litre.
Marketers who were able to complete their payment processes on the NNPC trading payment portal commenced the lifting of petrol under the existing agreement between marketers and the refinery.
The Managing Director of 11Plc, Tunji Oyebanji, reportedly confirmed that some marketers had started lifting the products at N765.99 from the Dangote refinery through NNPC, the sole off-taker of the product.
“We were among the first marketers to complete the payment on the NNPC portal. We have no direct arrangement with the refinery. We don’t know the contractual financial arrangement between NNPC and the refinery but what I can confirm is we are buying at N765.99 from NNPC to lift Dangote petrol,” he stated.
Also, the Executive Vice President of Downstream at NNPC, Adedapo Segun, had said marketers could not purchase petrol directly from the refinery because the product is still sold at a subsidised rate.
“That is the same thing happening with Dangote. I said earlier that Dangote is a company and it is going to sell at market price,” he told Journalists.
Segun said, “The market value of PMS is still higher than what N766 or N765 or N799 that NNPC is selling. The situation has not changed there. So, NNPC’s off-taking is only because the others would not buy at the price Dangote will be willing to sell, which is reasonable.
“As soon as the price allows for it, you will see the marketers go to Dangote and buy. So, instead of saying NNPC is the only off-taker, let’s put it this way: NNPC is the only entity that is willing to offtake because NNPC has a role under the law to be the energy provider of the resort.”
The spokesperson of NNPC, Olufemi Soneye, had earlier said the refinery bought petrol from Dangote refinery at N898/litre. He said market forces now determine domestic pump prices.
“For this initial 16.8 million litres that were given to us, it was at the rate of N898,” Soneye had said.
In its reaction, the spokesperson for the Dangote refinery, Anthony Chiejina, had described the claim as “misleading and mischievous, aimed at undermining the refinery’s achievement in addressing Nigeria’s energy insufficiency.”
However, the refinery failed to disclose the price it sold the product to NNPC.
IPMAN, experts react
The Secretary of IPMAN, Abuja-Suleja, Mohammed Shuaibu, said the position of Dangote on the removal of subsidy on PMS had been long overdue, stressing that the price of the commodity was already high.
“Petrol price is already high and at times we wonder if there is still a subsidy on it. This is why many major dealers have commenced the importation of petrol. So if there is a subsidy it should be removed now that the price is already very high,” he stated.
On his part, the Director of the Centre for Promotion of Public Enterprise, Dr Muda Yusuf, characterised the high pump prices in Nigeria’s filling stations as a difficult and tricky situation.
Yusuf said the Federal Government took a hard but necessary decision to remove subsidies on oil and urged Nigerians to be more understanding of the current PMS prices from the Nigerian National Petroleum Company.
He said, “The reality is that this is a very difficult situation for the government and also for the NNPC and I hope that as citizens we will show some understanding at this time. It’s a very, very tricky situation. If we had continued on that trajectory at the end of the year, the subsidy bill that the government will be incurring will be getting close to between N8tn – N10tn.”
Yusuf explained that factors including the importation of petroleum products with a devalued naira and differences between local pump prices and those of neighbouring countries have contributed to an unsustainable practice of fuel subsidy.
“This is not sustainable,” Yusuf remarked. “The subsidy bill had risen to that level first because of the depreciation of the currency, as all the petroleum products we were consuming were being imported.
“Secondly, because the relative price between the domestic price and the price in the sub-region and especially our neighbouring countries has widened considerably. Petrol cost per litre in our neighbouring countries is between N1,300-1,500 equivalent per litre.
He added, “So, we are not only subsidising those of us Nigerians, we are subsidising the entire sub-region, even up to the Central African Republic. That is the dilemma that the government is faced with. Even at this price of N800 or N800 plus, I’m sure there is still some element of subsidy.”
Yusuf noted that while PMS price differences in countries along Nigeria’s borders fueled smuggling, it was an even greater task to police the borders, including the coastal borders.
Yusuf said, “You can imagine the incentive for smuggling and there is only so much that those who are policing the border can do because we have very wide borders. We have the coastal waters through which people can smuggle these items. It’s extremely difficult to police.”
Yusuf assessed that the Federal Government’s decision to end the oil subsidy regime was due to it being stretched to the limit in terms of what could be fiscally accommodated.
He said, “I’m sure the administration has been struggling; doing its best not to allow this price to increase. You could listen to the admission of the NNPC that is even owing suppliers.
“We are almost on the verge of bankruptcy as a result of this fuel issue. I know it’s not palatable for those of us who are citizens because many of us have also been pushed to the edge. We are already on edge.
“We have been pushed to the limit because of the cost of living, the cost of operation. But this is an extremely difficult decision that the government needs to make,” he continued.
Yusuf expressed optimism at the beginning of Dangote refinery operations and the possibility of other domestic refineries becoming active to salvage the country’s energy situation.
“We’ll be able to manage the situation better, at least not to allow this price to go beyond what has been put forward,” he said. “And if the situation improves, then maybe the price can even be further moderated.”
MEMAN lifts 50m litres
Members of the Major Energies Marketers Association of Nigeria have lifted over 50 million litres of petrol from the Dangote refinery in the past week.
Sources told one of our correspondents that about 57 million litres were lifted from the refinery which began the sale of petrol on September 15.
During a webinar on Tuesday, the Chairman of MEMAN, Huub Stokman, confirmed that major marketers have started loading the product from the 650,000-capacity refinery.
However, Stokman did not reveal whether or not the marketers were buying directly from Dangote or from the product bought by the Nigerian National Petroleum Company Limited.
“I can tell you that we have started loading PMS from Dangote refinery. Our members have lifted millions of litres from Dangote,” Stokman stated.
On pricing, the MEMAN chairman declined comments, saying the association was not in a position to discuss how much a company will sell its product.
While congratulating Nigeria on the development of its refining capacity, Stokman urged Nigerians and stakeholders to remain positive instead of engaging in unhealthy rivalry.
According to him, Nigeria is now Africa’s refinery hub with Dangote and other modular refineries coming on board.
“As Nigeria transforms into an African refining powerhouse, MEMAN celebrates the significant strides made by public and private entities alike. The opening of Dangote Refinery and the development of modular refineries represent critical steps toward securing Nigeria’s energy future.
“While initial start-up challenges are inevitable, these refineries will shape the country’s energy landscape for decades to come,” the chairman noted.
He said MEMAN remains steadfast in its commitment to ensuring the delivery of affordable, high-quality energy products in a safe, sustainable, and competitive environment.
He added, “Fair competition is critical to driving progress and innovation within the industry. We emphasise the importance of maintaining an environment where competition can thrive, as it encourages efficiency, reduces costs, and ensures consumers have access to the best possible energy solutions.
“The complex nature of the energy supply chain, especially during this period of energy transition, requires all stakeholders—public and private—to work together to drive progress. By fostering cooperation, the industry can address challenges more effectively and deliver the best possible outcomes for consumers and the nation.”
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According to recent information from the National Bureau of Statistics (NBS), the 36 states of Nigeria collectively received a substantial allocation of N22.90 billion from the federation account allocation committee (FAAC) as an ecological fund between January and May 2025.
This ecological fund serves as a crucial component of Nigeria’s federal revenue system, specifically dedicated to addressing pressing environmental challenges that the country faces, including erosion, desertification, flooding, oil spills, and droughts.
The management of this fund falls under the jurisdiction of the Ecological Fund Office, which operates within the Office of the Secretary to the Government of the Federation.
In April, the Nigeria Hydrological Services Agency (NIHSA) issued a stark warning that 1,249 communities across 30 states and the federal capital territory (FCT) are at high risk of flooding this year.
Additionally, another 2,187 communities spanning 293 local government areas were categorized as facing moderate flood risk. States such as Abia, Benue, Lagos, Bayelsa, Rivers, and Jigawa have been identified as particularly high-risk areas.
The repercussions of flooding were severely felt in 2024, where the natural disaster tragically claimed the lives of 321 individuals, impacted over 1.37 million people, and displaced more than 740,000 across the nation.
During the five-month period in question, Kano State emerged as the largest beneficiary of the ecological fund, receiving the highest allocation of N1.29 billion.
This was closely followed by Lagos, which secured N1.09 billion, and Borno, which received N1.01 billion. Other allocations included Katsina with N997.04 million, Bauchi with N970.20 million, and Oyo with N909.73 million.
Interestingly, Bayelsa, identified as one of the high-risk states, was allocated N358.80 million.
A detailed analysis by TheCableIndex revealed regional disparities in fund allocation, with the north-west zone receiving the most significant share of N5.85 billion.
The south-west followed with an allocation of N4.59 billion, while the north-east received N4.36 billion. The south-east was granted N3.15 billion, and the north-central zone received N2.54 billion, leaving the south-south region with the smallest allocation of N2.40 billion.
Here is a list of the ecological funds allocations to states in five months (January – May 2025):
| S/N | State | Total Ecological funds in five months (N) |
| 1 | Kano | 1,286,544,379.13 |
| 2 | Lagos | 1,086,570,190.07 |
| 3 | Borno | 1,007,737,588.02 |
| 4 | Katsina | 997,035,278.84 |
| 5 | Bauchi | 970,203,089.39 |
| 6 | Oyo | 909,728,617.21 |
| 7 | Jigawa | 907,057,103.18 |
| 8 | Sokoto | 893,902,300.00 |
| 9 | Enugu | 815,695,489.05 |
| 10 | Adamawa | 807,977,549.14 |
| 11 | Zamfara | 807,143,535.75 |
| 12 | Anambra | 806,463,898.32 |
| 13 | Yobe | 805,428,208.86 |
| 14 | Ogun | 753,548,977.73 |
| 15 | Osun | 739,734,927.15 |
| 16 | Ebonyi | 725,642,920.73 |
| 17 | Ekiti | 725,233,444.67 |
| 18 | Kaduna | 531,361,448.30 |
| 19 | Niger | 480,382,255.58 |
| 20 | Benue | 454,814,057.07 |
| 21 | Kogi | 448,226,630.67 |
| 22 | Rivers | 437,368,743.17 |
| 23 | Kebbi | 428,229,139.39 |
| 24 | Plateau | 423,493,660.86 |
| 25 | Imo | 421,654,520.82 |
| 26 | Delta | 411,776,880.86 |
| 27 | Cross River | 407,812,547.55 |
| 28 | Akwa Ibom | 407,743,010.50 |
| 29 | Taraba | 390,653,979.13 |
| 30 | Gombe | 381,994,204.98 |
| 31 | Abia | 379,750,074.07 |
| 32 | Edo | 379,206,575.27 |
| 33 | Ondo | 377,520,921.32 |
| 34 | Nasarawa | 373,996,813.87 |
| 35 | Kwara | 361,000,036.84 |
| 36 | Bayelsa | 358,837,261.57 |
| Total | 22,901,470,259.06 |
Delta State Governor, Rt. Hon. Sheriff Oborevwori, on Thursday urged the Brazilian business community to seize the vast investment opportunities available in the state and maintained that Delta is strategically positioned to become a hub for trade, agriculture, energy, and industrial development in Nigeria and West Africa.
The Governor made the call while delivering his remarks at the “Delta State-Focused Business and Investment Roundtable” in São Paulo, where he highlighted the state’s natural endowments, strategic location, and ongoing reforms aimed at creating a friendly environment for investors.
Oborevwori noted the strong ties between Nigeria and Brazil, citing similarities in population size, agricultural potential, cultural diversity, tropical climate, and a shared passion for football.
He described the roundtable as an avenue to forge strategic partnerships that would accelerate sustainable growth for both countries.
He explained that since its creation in 1991, Delta State has grown into one of the top five largest economies in Nigeria with a landmass of over 18,000 square kilometres and a population of more than six million people.
According to him, “Delta is blessed with vast natural resources and youthful human capital, making it an attractive destination for investors.
“Delta is Nigeria’s leading producer of crude oil and holds the largest natural gas reserves in the country, with two major export terminals in Escravos and Forcados”.
He also drew attention to the state’s long coastline, four seaports, and the on-going concession of the Burutu Seaport, which he said has the potential to become a major trans-shipment hub for West and South-West Africa.
He added that Delta is richly endowed with fertile soil for agriculture, with strong prospects in cassava, palm produce, rice, maize, aquaculture, and livestock.
“The state also has deposits of kaolin, silica, coal, lignite, and iron ore available for commercial exploitation,” he added.
On infrastructure, Oborevwori emphasized Delta’s advantage as a connecting point to major Nigerian markets such as Lagos, Onitsha, and Aba, while also boasting of three functional airports to enhance accessibility.
He stressed that his administration has invested massively in road networks to improve connectivity and ease of movement of goods and services.
Since assuming office in May 2023, the Governor said his administration has worked deliberately to improve the ease of doing business through tax harmonisation, the establishment of economic free trade zones in Koko and Kwale, and the enactment of business-friendly laws.
He also noted Delta’s recognition in 2024 by the Federal Ministry of Petroleum Resources as the safest state in Nigeria for oil and gas investments.
Oborevwori further disclosed that the state is advancing its agro-industrialisation drive with the development of a 180-hectare Agro-Industrial Park designed to host between 20 and 30 processing plants, along with new public-private partnership models for housing, energy, and manufacturing.
He explained that Delta has adopted a decentralized mini-grid model to boost sustainable energy and drive industrialisation.
The Governor expressed particular interest in learning from Brazil’s world-renowned ranching system, noting that Delta is eager to replicate aspects of the model to boost livestock production.
“I eagerly look forward to partnering with the business community of Brazil for our mutual benefit,” Oborevwori concluded.
The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) has initiated a range of strategic programs aimed at fostering entrepreneurship, stimulating economic growth, and enhancing the capacities of micro, small, and medium enterprises (MSMEs) throughout the nation.
A primary component of these initiatives is the SMEDAN Conditional Grant Scheme for Micro Enterprises, specifically designed for nano and small businesses.
This scheme provides conditional financial grants to assist nano enterprises in workforce development and the procurement of essential equipment. Its objective is to promote job creation and ensure business sustainability at the grassroots level. Click link to apply
Vice President Shettima
Beneficiaries, which include kiosks, vulcanisers, recharge card vendors, and other petty traders, will receive financial assistance tailored to their specific needs. Each nano business that hires at least one employee will be eligible to receive N50,000, thereby promoting employment and bolstering local economies.
Interested entrepreneurs may apply through several designated channels, including online portals, application forms, and specific government offices. Applicants are required to submit comprehensive documentation and project proposals that comply with the program’s guidelines, with an emphasis on the necessity of hiring at least one employee. The initiative aims to support projects that enhance the competitiveness, productivity, and sustainability of MSMEs. Such projects may encompass investments in technological advancements, infrastructure development, capacity building, market expansion, and innovation initiatives.
The grant amount is firmly set at N50,000 per beneficiary. Participating micro-enterprises can expect to realize various advantages, including improved operational performance, enhanced competitiveness, increased market access, job creation, and overall enterprise growth and development. Link to apply: grant.fedgrantandloan.gov.ng.
This scheme is part of the broader intention of the Nigerian government to stimulate small business development on a national scale. Vice President Kashim Shettima recently inaugurated a cutting-edge information and communication technology center for MSMEs in Cross River State, reflecting the current administration’s commitment to equipping entrepreneurs with essential tools and skills.
During the inauguration, Vice President Shettima announced that each distinguished MSME recognized would receive an unconditional grant of N50,000. He emphasized that this financial assistance serves as a gift to facilitate their business growth rather than as a loan. Furthermore, additional initiatives include a N75 billion MSME Intervention Fund through the Bank of Industry, a N50 billion Presidential Conditional Grant Scheme targeting one million nano businesses, and N75 billion allocated to support manufacturers, enabling each eligible manufacturer to access up to N1 billion at low interest rates.
As the government implements the Presidential Conditional Grant Scheme to support nano businesses across the nation, it has earmarked significant financial resources to ensure that these initiatives benefit all local government areas. This comprehensive framework underscores a robust commitment to enhancing the entrepreneurial landscape in Nigeria.
The Governor of Delta State, Sheriff Oborevwori, has authorized the immediate allocation of N10 billion to address outstanding pension arrears owed to retirees within the state.
This announcement was made on Tuesday during a meeting with Edwin Ogidi-Gbegbaje, the Chairman of the Bureau of State Pensions, as well as Anthony Osanekwu, the State Chairman of the Association of Contributory Retirees, in Asaba, as reported by the News Agency of Nigeria (NAN).
Governor Oborevwori indicated that the purpose of the meeting was to discuss various issues pertaining to the welfare of retirees, including the settlement of backlog payments and challenges related to the migration under the Contributory Pension Scheme (CPS). He noted that his administration has thus far disbursed over N36 billion for pension services in the state. Furthermore, he highlighted that N1.4 billion has been allocated monthly for pension payments since he assumed office.
The governor emphasized that the state has consistently fulfilled its monthly pension obligations during his administration. However, he acknowledged the necessity of urgently addressing the arrears that predated his tenure. “Our retirees are individuals who have devoted their best years to service in the state. It is both just and necessary that they receive the benefits to which they are entitled, and ensuring their welfare remains a top priority under my administration,” he stated.
In conjunction with this announcement, the governor established an oversight committee to monitor the implementation of the released N10 billion, underscoring the importance of maintaining transparency in the process. He reiterated his administration’s dedication to prioritizing the welfare of senior citizens who have contributed significantly to the state.
Ogidi-Gbegbaje characterized the governor’s announcement as a “pleasant surprise,” expressing confidence that the N10 billion allocation would provide substantial relief to retirees. He assured that the funds would be exclusively utilized for pension payments, emphasizing that the system is designed to ensure transparency and accountability.
Osanekwu also expressed gratitude to the governor for this unexpected and generous decision, remarking, “You took us by surprise; our expectations were significantly lower than the N10 billion you have just approved. I am elated, and I am confident that this news will bring significant joy to pensioners across the state.”
In May, Governor Oborevwori reaffirmed his administration’s commitment to the welfare of workers, noting that Delta State was among the first to implement a new minimum wage of N77,500, exceeding the national benchmark of N70,000. This adjustment increased the monthly wage bill from N11.5 billion to N15.3 billion.
As part of its civil service reforms and engagements, the administration has facilitated three town hall meetings and a notable dinner with senior civil service staff. “We have upheld our commitments in this area. Over 8,000 public servants have received training, including 450 senior management staff who participated in a comprehensive seven-weekend training program in collaboration with the Administrative Staff College of Nigeria (ASCON), thus marking a significant advancement in leadership development,” he stated.
The governor conveyed that to enhance understanding of the MORE Agenda, the government organized a strategic retreat with Sewa Assets Management for commissioners and heads of inter-ministerial agencies.
Regarding workforce expansion, he reported that 13,497 new teaching and non-teaching staff members have been recruited across the state’s 25 local government areas to address manpower shortages. Furthermore, promotion interviews have been conducted for over 2,193 officers, reflecting the administration’s commitment to career advancement.
The African Development Bank (AfDB) has said that the continent is losing more than $580 billion every year through corruption and illicit capital outflows, a loss that continues to undermine the continent’s economic progress and deepen its debt woes, according to Nairametrics.
AfDB President, Akinwumi Adesina, who stated this in a Bloomberg interview, said the losses are so severe that they outweigh the continent’s ability to finance infrastructure and development, even as Africa’s total debt burden nears $2 trillion.
“It doesn’t matter how much water you pour into a bucket if the bucket is leaking. If you’re able to reduce the leakages to illicit capital, also corruption and all of these things, Africa will be able to keep a lot of these resources and meet the amount of infrastructure it needs,” Adesina said.
$1.6 billion lost daily
The AfDB estimates that Africa loses about $1.6 billion every single day to what it calls “financial leakages.”
This includes $90 billion annually in illicit financial flows, $275 billion lost through profit-shifting by multinational corporations, and $148 billion siphoned off due to corruption.
These losses come at a time when the continent is grappling with an annual infrastructure financing gap of up to $170 billion, a shortfall that must be addressed if Africa is to unlock economic growth and create jobs for its youthful population. Instead of channelling resources into such projects, many African governments are overwhelmed by soaring debt-service costs.
A joint study by the Boston University Global Development Policy Center and the Institute for Economic Justice recently found that debt servicing in Africa has climbed to its highest level since the early 2000s debt crisis.
Shockingly, more than half of African governments now spend more on interest payments than on public healthcare.
Adesina stressed that while access to concessional financing and debt restructuring are important, curbing corruption and illicit outflows remains the single most crucial step to safeguarding Africa’s resources and reducing its reliance on debt.
What you should know
The AfDB, in its recently released 2025 African Economic Outlook, had expressed concern about Nigeria’s rising debt costs, stating that the country is projected to spend 75% of its revenues on interest payments in 2025.
According to the Bank, a country’s debt-to-GDP ratio may be low and still face high debt burdens if substantial shares of revenue are channeled towards debt service payments.
The AfDB further explained that while many African countries experienced declining debt levels in 2022–2023 due to favorable interest-growth differentials, this trend remains vulnerable.
A slowdown in economic growth or a rise in interest rates, the Bank noted, could reverse recent gains. Moreover, reckless fiscal behavior and excessive borrowing, especially on commercial terms, could undermine progress.
President Bola Tinubu’s assumption of office on May 29, 2023, came at a critical juncture in Nigeria’s history, characterised by many challenges.
His declaration, “Subsidy is gone,” has sparked significant backlash against his administration, particularly as his tough policies have led to increased hardship for many Nigerians.
Former Nigerian military leader Ibrahim Gbadamosi Babangida has provided a comprehensive analysis of President Bola Tinubu‘s administration. …CONTINUE READING.
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Babangida, a man of immense power and wealth, Babangida ruled the country as military Head of State from 1985 to 1993, leaving behind a legacy of economic reforms, political controversies, and an empire of investments that continues to fuel speculation decades later.
His administration was marked by sweeping economic policies, including introducing the Structural Adjustment Program (SAP), which aimed to stabilize the economy through privatization, foreign investment, and currency devaluation.
According to BusinessDay report, IBB has urged Nigerians to exercise patience and resilience during this challenging period, emphasizing that the difficult decisions being made by Tinubu are necessary for the long-term economic advancement of the nation. Babangida believes that these measures, while tough in the short term, are crucial for positioning Nigeria competitively on the global economic stage.
His insights reflect a hope that with perseverance, the country will ultimately reap the benefits of these strategic reforms.
The Nigerian people will reward that kind of strength, Babangida announced.
He acknowledged the challenges that Nigerians are experiencing as a result of the financial reforms currently being implemented, but he insisted that Tinubu’s policies would be validated by the long-term benefits. Pain does not last forever.
He said, “I have witnessed governments in the past making difficult decisions, and I am confident that Nigerians will see the results if patience is managed effectively.”
He emphasized that Tinubu’s ability to navigate complex political challenges has positioned him favorably for continued leadership, highlighting the significance of his past achievements and adaptability in the ever-changing political arena.
It is said that Tinubu is an expert in political survival. Despite the fact that he has been subjected to pressure, criticism, and enormous challenges, he continues to move forward.
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