World Bank Condemns N2.9tn Funding to End Petrol Subsidy in June 2022: FG

World Bank Condemns N2.9tn Funding to End Petrol Subsidy in June 2022: FG

World Bank Country Director for Nigeria

World Bank Condemns N2.9tn Funding to End Petrol Subsidy in June 2022: FG

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The World Bank has condemned the Nigerian government’s continuous spending on petrol subsidies, which it estimates would total N2.9 trillion this year NewsReport gathered.

Its Country Director for Nigeria, Shubham Chaudhuri, stated on Monday during a panel session at the 27th National Economic Summit that the country might redirect subsidy funds to primary healthcare, basic education, and rural roads.

“This year, Nigeria is on course to spend N2.9 trillion on PMS subsidies, which is more than the country spends on health,” he said.

Also speaking during the event, Zainab Ahmed, Minister of Finance, Budget, and National Planning stated that the Federal Government has planned for a petrol subsidy till the end of June next year.

“In our 2022 budget, we only factored in subsidies for the first half of the year; for the second half of the year, we are looking at complete deregulation of the sector, saving foreign exchange, and maybe earning more from the oil and gas industry,” she explained.

The World Bank director, who compared Nigeria to a malnourished person in need of immediate care, stated that some crucial decisions must be made now in order for the country to realize its full potential.

He said, “I think the urgency of doing something now is because the time is going in terms of retaining the hope of young Nigerians in the future and potential of Nigeria. The kinds of things that could be done right away – the petrol subsidy; yes, I hear that six months from now, perhaps with the PIA(Petroleum Industry Act) coming into effect, this will go away.

“But the fact is can Nigeria even afford to wait for those six months? And there is a choice: N3tn to PMS subsidy which is depriving states of much-needed revenues to invest in basic services.”

The Chairman, Presidential Economic Advisory Council, Prof. Doyin Salami, said he had argued for a long time that subsidy really needed to go.

He said, “With the PIA essentially it makes illegal petrol subsidy and yes, there is a period where NNPC and the new regulatory agencies must calibrate themselves, but at the end of this period – and I think it is about six months, which explains why the minister has said for the first half of the year, there is provision.

“My view will be if we could get it done sooner than that, it will be excellent. It releases money. The key point is simply this: we are now, any which way, at the tail end of that conversation, except if we choose not to obey the law. My sense is we will obey the law and subsidy will be gone.”