Senate confirms Oyedele as Minister of State for Finance

– Oyedele pushes crude forward sales to shield Nigerians from fuel price shocks

– Calls for realistic budgeting

– Says most Nigerian budgets are deficit-financed

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By Adesuwa Tsan, Abuja

As Nigerians grapple with higher fuel prices and raised transportation costs due to fluctuations in global crude oil markets, the newly confirmed Minister of State for Finance, Taiwo Oyedele, on Wednesday told the Senate that forward crude sales could help insulate the economy and stabilise government revenues while providing more predictable fuel pricing for citizens.

He said this during his screening session at the National Assembly on Wednesday.

Oyedele explained that by locking in prices for a portion of Nigeria’s crude production, the government could guarantee budget financing and reduce the impact of sudden international oil price swings.

“One strategy used in several countries is selling crude forward. Nigeria can lock in a price for a portion of our crude for a period of time. That would guarantee budget financing and also give Nigerians stability so prices are not fluctuating the way we have seen in recent days,” he said.

Speaking on the non-payment of contractors due to poor revenue generation, Oyedele advocated for contracts to be awarded according to available funds to prevent a situation where a trust deficit premium is placed on the government. He explained that the premium means that, where a contract should be priced at N1 billion, the contractors would charge N2 billion to cover losses from government payment delays.

Oyedele, while speaking on how to improve Nigeria’s revenue base, noted that there has historically been too much focus on taxation and oil revenues when other sectors, such as mining, hold much potential.

“For many years as a country, we have disproportionately focused on taxation and oil and gas, and that has taken our attention away from other areas where we can generate revenue,” he said.

“What we have identified is that the biggest impediment to the growth of the solid minerals sector is policy uncertainty,” he said. “The team and the Minister for Solid Minerals have been doing a lot, but we need to complement that with a policy certainty environment. We may be coming to the National Assembly in this regard.”

Speaking further, Oyedele stressed the need for realistic budgeting and improved execution of approved projects, saying, “When we have budgets, we need to ensure that there is funding behind them and that there are releases so that we can execute them — 100 per cent if possible — particularly for capital expenditure,” he said.

“Looking at Nigeria’s budgets over the past five years, we have had many years where the budgets appeared too ambitious compared to the revenue. We were focusing on the expenditure side without paying enough attention to the revenue side.”

He noted that nearly half of Nigeria’s budgets are currently deficit-financed. “Today, if you combine the federal and state governments, nearly half of our budgets are deficit-financed. We need to pay more attention to realistic revenue to drive our projects,” he said.

“If I am confirmed by this distinguished Senate, one of the first things I will do is create a clear status quo analysis. If we owe contractors, we should know it. We should say, ‘As of today, this is how much we owe contractors, this is how much we have, this is the gap, and this is how we plan to raise the money,’ Oyedele said.

He further emphasised the need for prudent government spending to address inflationary pressures and ensure that revenues saved from subsidy removal benefit Nigerians directly. “If the government gets more revenue because subsidy has been removed, it is actually a transfer from the people to the government. The only way we can make that sacrifice worthwhile is to spend that money in areas of priority for the people,” he said.

Oyedele expressed confidence that investments in infrastructure linking farms to markets could deliver rapid economic benefits. He said, “Those priorities can be as basic as roads from the farm to the warehouse, to the factory and to the markets. When that happens, people see the impact almost immediately.”