The Chairman of the Senate Committee on Finance, Senator Mohammed Sani Musa, has called on state governments to invest the additional resources accrued to them after the removal of subsidy on PMS to aggressive investment in agricultural value chains.
He stated this in the wake of the controversy of his statement on the fuel subsidy removal generated over the weekend.
Speaking to the press, Senator Sani clarified that removing the fuel subsidy, though challenging, is beneficial, as it provides more revenue for states to improve citizens’ lives.
He, however, added that his assertion “Was not intended to overlook or diminish the economic challenges faced by Nigerians. Rather, it was a statement grounded in the reality that for years, subsidy payments have lined the pockets of a few powerful individuals at the expense of the nation.”
He noted that while subsidies are not inherently harmful, how they were managed in Nigeria over time hindered social and economic growth.
The Niger East Senator recommended that both federal and state governments should in the alternative introduce subsidies within the agricultural sector, similar to practices in developed nations.
“To mitigate the impact of subsidy removal on fuel, we should subsidise food production. Fertiliser, for example, shouldn’t be sold at N15,000 if we expect farmers to produce at affordable rates,” he said.
He argued that a subsidised agricultural value chain-from equipment to financing-could reduce production costs and increase output.
Senator Sani said “I will still stand by my point that instead of having one trillion Naira as subsidy-shared by a few Nigerians with their collaborators-the funds should go to the government, which can distribute them to the states for broader societal benefits. But the real problem is that we don’t produce anything in this country.”
He emphasised that maintaining the subsidy on Premium Motor Spirit (PMS) had become unsustainable.
“We were paying over a trillion Naira every month for subsidy, and it was Nigerians who bore that cost. But who ultimately received the funds? A small group of Nigerians,” he said.
According to Musa, the decision to end the subsidy was necessary for the country’s economic stability, despite the financial strain it has placed on citizens in the short term.
Musa clarified that inflation in Nigeria stems more from the naira’s devaluation than from the subsidy removal itself, underscoring the country’s dependency on imports.
He noted, “the economy is based on consumption, not production and this reliance on foreign exchange is contributing heavily to our current challenges.”
The senator advised state governors to use the increased revenues generated from subsidy savings to foster growth and address inflation.
“Today, states that used to receive around N7 billion are now getting close to N20 billion monthly due to the subsidy removal. Governors must use these funds judiciously,” he said, pointing to Niger State as a positive example. Musa commended the Niger State governor for leveraging the state’s agricultural potential, which he said could inspire similar initiatives across other states.
“If governors harness their states’ unique strengths and invest wisely, we could effectively tackle food inflation, which has a cascading effect on overall production,” he explained.
Musa highlighted Nigeria’s capacity to produce staple crops like rice and suggested that consistent local production, regardless of seasonal changes, could reduce reliance on imports and ease currency pressures.