The Federal Government has assured Nigerians that it has no plan to remove fuel subsidy, even as queues continue to emerge in filling stations in some
The Federal Government has assured Nigerians that it has no plan to remove fuel subsidy, even as queues continue to emerge in filling stations in some parts of the country.
Recall that the Managing Director, International Monetary Fund, Christine Lagarde, had last week called on the Federal Government to remove fuel subsidy, saying it was the right thing to do. Lagarde had said that with the low revenue mobilisation that existed in Nigeria in terms of tax to Gross Domestic Product, it was important for the country to remove fuel subsidies and move available funds into improving health, education, and infrastructure, among others.
Days after Lagarde’s call for fuel subsidy removal, fuel queues resurfaced in Nigeria and worsened as of Saturday. In view of this, the finance minister, Zainab Ahmed explained that the Federal Government was not anywhere near subsidy removal.
She said, “There is no imminent plan to remove fuel subsidy. We are here to discuss with the global community on various policy issues. One of the issues that always come up in the report, especially the IMF World Economic Outlook report, is how we handle fuel subsidies.
“So, in principle, the IMF will say fuel subsidies are better removed so that we can use the resources for other important sectors. And in principle, that is a fact to do so. But in Nigeria, we don’t have any plan to remove fuel subsidy this time because we have not yet designed buffers that will enable us to remove subsidy and provide cushions for our people. So, there is no plan to remove fuel subsidy. We will be working with various groups to find out what needs to be done if we have to remove fuel subsidy. What is the alternative? We haven’t yet found viable alternatives. So, we are not at the point of removing fuel subsidy.”
In her immediate response to the IMF’s recommendation that Nigeria should remove fuel subsidy, Ahmed had said the FG would look into the advice by the IMF on subsidy removal but cautioned that this would be done in phases.
“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.”
