The federal government appears to have plans to remove subsidy on fuel, bot it is not ready to rush through it because of the implications of doing so, Finance Minister, Zainab Ahmed, has told the world.
Apparently reacting to suggestions from International Monetary Fund boss, Christine Lagarde, Ahmed told journalists at the ongoing spring meetings of the International Monetary Fund and World Bank Group, “The advice from the IMF on fuel subsidy removal was good advice but also we have to implement it in a manner that is both successful and sustainable. We are not in a situation to wake up one day and just remove subsidy.
“We have to educate the people, we have to show Nigerians what the replacement for those subsidies will be so we have a lot of work to do.
“We also need to understand that you don’t remove large amounts of subsidy in one go, it has to be graduated and the public has to be well-informed on what you are trying to do”.
Lagarde had said on Thursday that Nigeria and other countries across have spent $5.2 trillion on fuel subsidy since 2015 adding that such money could have been spent on health and education.
Her words, “We believe that removing fuel subsidies is the right way to go.
“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, 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. Numbers are quite staggering.
“If that was to happen, 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.
“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.
“As far as Nigeria is concerned that, with the low revenue mobilization that exists in the country in terms of tax to GDP, Nigeria is amongst the lowest.
“A real effort has to be done in order to maintain a good public finance situation for the country. And in order to direct investment towards health, education, and infrastructure.”