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FG announces June 2022 as ending of fuel subsidy, World Bank condemns N2.9tn funding

world - Lagospost.ng

As a result of the Nigerian government’s ongoing spending on petroleum subsidies, the World Bank has said that the country is on target to spend N2.9 trillion this year.

In a panel discussion on Monday during the 27th National Economic Summit, the organization’s Country Director for Nigeria, Shubham Chaudhuri, said money spent on subsidies could be channelled into primary healthcare, basic education, and rural roads.

“This year, Nigeria is on track to spend N2.9tn on PMS subsidy, which is more than it spends on health,” he said.

In his words, the World Bank director compared Nigeria to a malnourished person who needs immediate treatment. He said some significant decisions need to be made now if the country is 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.”

Zainab Ahmed, Minister of Finance, Budget and National Planning, also spoke at the session and announced that the Federal Government will provide petrol subsidies right up to the end of June next year.

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

Dr Doyin Salami, chair of the Presidential Economic Advisory Council, said he had advocated for a long time for eliminating the subsidy.

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.”

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