CEM REPORT | In its support to ease the pain and suffering of Nigeria and Nigerians over the inevitable removal of fuel subsidy the World Bank Group has readied support in phasing out the policy while increasing social assistance for the poor and vulnerable.
According to a statement published on the Bank’s website the president of the group David Malpass, in a meeting between with Vice President Yemi Osinbajo welcomed Nigeria’s commitment to achieving universal energy access and reducing GHG emissions.
He also stressed the need for an enabling policy and regulatory environment alongside strengthened institutions in the energy sector.
“President Malpass and Vice President Osinbajo discussed Nigeria’s Energy Transition Plan. President Malpass welcomed Nigeria’s commitment to achieving universal energy access and reducing GHG emissions while maintaining reliable baseload. President Malpass emphasized the importance of integrating climate and development, as well as the need for an enabling policy and regulatory environment alongside strengthened institutions in the energy sector. President Malpass affirmed to Vice President Osinbajo the WBG’s readiness to support Nigeria in phasing out regressive fuel subsidies while increasing social assistance for the poor and vulnerable.”
Malpass also stressed the need for a unified exchange rate in Nigeria, which would significantly improve the business-enabling environment in Nigeria, attract foreign direct investment, and reduce inflation.
“President Malpass encouraged a decisive move toward exchange rate unification and stabilization by Nigeria, highlighting the economic benefits for the Nigerian people. President Malpass in emphasis told Vice President Osinbajo that a unified exchange rate will significantly improve the business-enabling environment in Nigeria, attract foreign direct investment, and reduce inflation. President Malpass and Vice President Osinbajo also discussed the importance of increasing domestic revenues through broadening Nigeria’s tax base and increasing the efficiency of tax administration.”
CEM reported that the Ministry of Finance at the Public Consultative Forum on the 2023-2025 Medium-Term Fiscal Framework estimated petrol subsidy payment at N6.72 trillion for the full-year 2023.
Also in April, there was an upward review of the budget amount for Premium Motor Spirit (PMS) subsidy for 2022 by N442.72billion, from N3.557 trillion to N4 trillion following the approval of a revised 2022 budget by the Nigerian Senate.
This has shot fuel subsidy in Nigeria by 890% over five years (2017-2021), although fuel prices have only increased by 12.1%.
The Central Bank of Nigeria (CBN) and other institutions have called on the Federal Government of Nigeria (FGN) to collapse the current fuel subsidy policy in face of the current realities of the high cost to the economy and inflation rate.