The Federal Government has said that state governments now have more money to operate following the removal of the petrol subsidy by Bola Tinubu’s administration in May 2023.

The Coordinating Minister of Finance, Wale Edun, revealed this at the National Health Financing Dialogue in Abuja on Thursday.

According to him, although the removal of the Premium Motor Spirit by Tinubu was a tough decision, the move has, however, paid off.

Removal of petrol subsidy has seen PMS price skyrocket to over ?1000 per litre across the country, before dropping below ?900 in recent times.

Although the inflation rates have fallen to 21.88 per cent in July from 22.22 per cent in June, it recorded a record high of about 27 per cent about one year ago.

Food inflation stood at 22.74 per cent year-on-year in July, compared to 39.53 per cent in the same month last year.

“Over the past two years, reforms have come at a cost as the Federal Government tries to fix the broken economy.

“The removal of the subsidy was a tough decision, but it has restored confidence in the economy. The states now have more than double the money they had before, and so they can provide their own contribution in important areas and others,” Edun said.

He said the fuel subsidy was benefiting only a few and even foreigners, and gulping about 2.5 per cent of the GDP.

“The opportunity cost of the fuel subsidy was that there wasn’t enough money for investments in healthcare, education and other sectors.

“Therefore, it is taking time to recover the type of investments that have been lacking over the years.

He added that the reforms were meant to build a competitive economy for every sector and for investors to thrive.

In June, the Federation Account Allocation Committee (FAAC) shared a total sum of ?1.818 trillion, being June revenue between the Federal Government, states and the Local Government Councils (LGs), as revenue increased by ?1.39 trillion.

In July, money shared by the three tiers of government increased to ?2.001 trillion.

Speaking on the health dialogue, Edun said the financing for health was about the government having increased revenue to put into the health sector, which will, in turn, create jobs for the people and grow the economy.

“And of course, it is about being about to crowd in the private sector where the real money is in the initiative.

“We know that Mr. Bill Gates, the philanthropist, said that it is when the public and private sectors create a gap that the philanthropy sector can come in. The philanthropy sector is also critical for financing the health sector.”

Edun noted that the dialogue was in alignment with the reform agenda of President Bola Tinubu and his pursuit of inclusive growth.

“As we all know, Health is Wealth,” he said, adding that financing required both private and public collaborations.

“Our success in the healthcare sector requires a coordinated system that mobilizes pools and allocation of financial resources to ensure that we have equitable access to health for our population and the required investments in medical services”.

He explained that the federal government was making concerted efforts to restore economic stability, which would be felt by every household.

“Important and bold fiscal steps are continued to be made to restore stability and make sure that the gains from the economic recovery are felt where it matters most…in the clinics, communities and of course in the households.”

Edun noted that more health practitioners were being trained across the country.

“I am sure you are all aware of the improvements in healthcare at the primary healthcare level. More practitioners are being trained, and better management of healthcare is also being put in.

“Apart from addressing decades-old macro-economic distortions, where the macro economy can thrive, we now have an attempt to build the government’s savings to enable public investments in assets and critical sectors,”

By doing so, he said, the government becomes a catalyst for the private sector, adding that the private sector was critical for health financing in the country. (Channels TV)