Hope Uzodimma, the governor of Imo State, has described the Federal Government’s removal of fuel subsidies as a “direct blessing” to subnational governments, emphasising the beneficial fiscal impacts on states.
Speaking to the press during an inspection of government-funded projects across the state, Governor Uzodimma highlighted the importance of translating the benefits of subsidy removal into tangible development outcomes for citizens.
He stated:
“We are reconciling the negative effects of fuel subsidy removal and the benefits in terms of social infrastructure, social benefits, and the ease of doing business occasioned by the provision of enabling infrastructure … so we balance. So, I think it [fuel subsidy removal] is a blessing, a direct blessing; it’s not a disguise to the sub-nationals because more money is now coming to states, and the state governments must do things to show the citizens that they are able to do these things because they now get more money as a result of the fuel subsidy removal by the federal government.”
Benefits of Subsidy Removal
Governor Uzodimma elaborated on how the additional funds accruing to states are being channeled into critical infrastructure and development projects.
- These initiatives aim to boost economic activities and enhance the standard of living for residents.
- He noted that the increase in federal allocations provides an unprecedented opportunity for governments to address longstanding developmental challenges and improve social services.
- The Uzodimma administration has prioritized expanding infrastructure development, including road networks, health facilities, and educational institutions.
- The governor stressed the importance of utilizing the funds effectively to foster public trust and ensure accountability.
While acknowledging the economic strain many Nigerians face due to higher fuel prices, Governor Uzodimma argued that the long-term gains from subsidy removal outweigh the immediate challenges.
Federal Government’s Support for States
In his first media chat in December 2024, President Bola Tinubu emphasised the equitable disbursement of funds to states and local government areas as one of his administration’s key measures.
This approach, he noted, aims to empower subnational governments to meet developmental goals and address pressing needs at the grassroots level.
“I’ve given more money to the states and local government levels,” President Tinubu said, emphasizing his focus on decentralizing financial resources for broader impact. He added:
“I’ve been transparent with my earnings. There is a publication as to how much this country is making,” reaffirming his commitment to maintaining open and honest governance practices.
Addressing State Financial Challenges
Earlier this month, the Presidency announced that the subsidy removal policy had rescued more than 19 states from the brink of bankruptcy.
“Before President Bola Tinubu took office, it was reported that over 19 states of the Federation were bankrupt, insolvent, and unable to pay salaries. The president’s policy of subsidy removal has generated increased revenue. Today, states are no longer discussing insolvency or bankruptcy,” said Daniel Bwala, Special Adviser to the President on Policy Communication.
The fiscal reforms resulting from subsidy removal have positioned states to take advantage of increased federal allocations, creating opportunities for sustainable development and improved service delivery.