World Bank urges FG to eliminate fuel subsidies

World Bank urges FG to eliminate fuel subsidies

David Malpass, the president of the World Bank Group, has stated that the bank is prepared to assist Nigeria in eliminating regressive fuel subsidies while boosting social assistance for the underprivileged and disadvantaged.

He also emphasised the necessity of a single exchange rate in Nigeria; adding that this would greatly enhance the country’s business-friendly environment, draw foreign direct investment, and lower inflation.

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Malpass made this statement during a meeting with Vice President Yemi Osinbajo.

This was confirmed in a statement posted on the Bank’s website on Thursday, September 1, 2022.

The statement read in part, World Bank 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.”

The statement noted that Malpass and Osinbajo discussed Nigeria’s Energy Transition Plan.

It added that the World Bank welcomed Nigeria’s commitment to achieving universal energy access; reducing GHG emissions while maintaining reliable baseload.

He further stressed 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.

Malpass and Osinbajo emphasised the significance of raising domestic revenues through expanding Nigeria’s tax base; while improving the effectiveness of tax administration, according to the statement.

The Nigerian Labour Congress and other interest groups threatened to hold protests in January of this year. But the Federal Government decided to keep the divisive fuel subsidies in place for an additional 18 months; despite the advice of economists and multilateral organisations like the World Bank and International Monetary Fund.

According to a recent analysis, the price of gasoline subsidies is anticipated to rise by 369.93% between 2021 and 2023.

The NNPC said that fuel subsidies consumed N1.43 trillion in 2021, despite the fact that January had no under-recovery data.

 

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