The International Monetery Fund, IMF, has advise the Federal Government to consider removing fuel subsidy for Nigerians.
Managing Director, Christine Lagarde, made this known at a press conference on Thursday, 3 April, 2019. Legarde stated that the reason is because the move would save a lot fiscally and in terms of human lives.
Delivering a lecture at a joint annual spring meeting of the World Bank in Washington DC, United State, she said:
“We believe that removing fossil fuel subsidies is the right way to go,” Lagarde affirmed.
“If that was to happen, then there would be more public spending available to build hospitals, to build roads, to build schools, and to support education and health for the people.”
The IMF boss gave a breakdown of figures spent on subsidy from 2015, explaining that it is too costly.
She, however, advised the Federal Government to put in place a social protection safety net while the subsidy was being removed, to reduce its effect on Nigerians.
“If you look at our numbers from 2015, it is no less than about $5.2 trillion that is spent on fuel subsidies and the consequences thereof,”
“And the Fiscal Affairs Department has actually identified; you know how much would have been saved fiscally but also in terms of human life if there had been the right price on carbon emission as of 2015. The numbers are quite staggering.
“Now, how this is done is more complicated because there has to be a social protection safety net that is in place so that the most exposed in the population do not take the brunt of the removal of subsidies principle. So that is the position we take.” – She said.
Furthermore, the IMF boss said that with the low revenue mobilisation that Nigeria is experiencing in terms of tax-to-GDP, the nation is amongst the lowest in the global index.
She said there was a need for realist efforts toward maintaining proper public finance situations for the country and to focus investments toward health, education, and infrastructure.