World Bank Pledges To Support Nigeria's Plan To End Fuel Subsidy
Nigeria's running battle with subsidy payments on fuel products may be coming to an end as the World Bank has promised to support the country's move in phasing out regressive fuel subsidies while increasing social assistance for the poor and vulnerable.
This announcement was made by the World Bank Group president, David Malpass during a recent meeting with Vice President, Prof. Yemi Osinbajo.
Vice President Yemi Osinbajo was in the United States of America, seeking global partnerships and support for Nigeria’s recently inaugurated Energy Transition Plan.
Osinbajo also met U.S. Vice President, Kamala Harris, U.S Secretary of Energy, Jennifer Granholm, and Secretary of Treasury, Janet Yellen.
The World Bank chief also canvassed for a unified exchange rate in Nigeria, a move he said would significantly improve the business-enabling environment in Nigeria, attract foreign direct investment, and reduce inflation
As seen in a statement on the World Bank website, “President Malpass encouraged a decisive move toward exchange rate unification and stabilization by Nigeria, highlighting the economic benefits for the Nigerian people. President Malpass emphasized to Vice President Osinbajo that a unified exchange rate will significantly improve the business enabling environment in Nigeria, attract foreign direct investment, and reduce inflation.”
In the first half of 2022, Petrol subsidy claims amounted to N2.6 trillion. This figure was higher than crude oil sale receipts from the Nigerian National Petroleum Company(NNPC) Limited during the same period.
Earlier this month, a senior public sector specialist, domestic resource mobilization, World Bank, Rajul Awasthi had described the subsidy issue as ‘an existential threat‘ and had given several warnings on the need to put an end to it.
Awasthi had also described Nigeria as being in an unfavorable economic situation due to dwindling revenue, the continued payment of trillions of naira on fuel subsidy by the government and the attendant economic challenges.
With the FG's decision to end subsidy payments by June 2023, the intervention by the World Bank will speed up the process and also, cushion the economic downturn that will be experienced during the transition process.