Subsidy Removal: Federal Gov’t Secures $800m World Bank Funding For Palliatives

The federal government announced that it had obtained a $800 million financing from the World Bank in advance of the removal of fuel subsidies to handle a portion of post-petroleum subsidy palliatives.

Following the Federal Executive Council (FEC) conference that President Muhammadu Buhari presided over on Wednesday at the Presidential Villa in Abuja, Minister of Finance, Budget, and National Planning, Mrs. Zainab Ahmed, revealed this to State House reporters.

For about 50 million Nigerians, who fall into the most vulnerable group of society, the $800 million was the first tranche of palliatives to be distributed through cash transfers, she claimed.

She responded, “The Petroleum Industry Act makes a commitment regarding the secondary issue of ending fuel subsidies. (PIA). A clause states that all petroleum goods must be deregulated 18 months after the PIA’s effective date, which puts the deadline for deregulation at June 2023.

Additionally, we added that clause to the 2023 Medium Term Expenditure Framework and the Appropriations Act so that we could stop providing gasoline subsidies by June 2023. We’re on track, we’re interacting with various stakeholders, and we’ve gotten money from the World Bank for the first round of palliatives, which will allow us to provide cash transfers to the most vulnerable members of our society who are now listed in the national social register.

Ten million homes are listed in that register as of right now. 50 million Nigerians are represented by 10 million families.

The various tasks that we have go beyond the necessity of just providing cash transfers, so we also need to raise more resources to allow us to do more than just the cash transfers and also in our engagements with the various stakeholders. For its members, Labour, for instance, might be interested in mass transportation.

So, the Minister said, “There are a number of things that we’re still planning and working on; some we can start executing immediately, some are more for medium-term implementation.”

She responded, “$800 million for the scale up of the National Social Investment Programme at the World Bank and it’s secured, it’s ready for this disbursement,” when asked how much money was received from the World Bank for the execution of the planned exit.

When asked if the current administration and the incoming administration had discussed subsidy removal, she responded, “There are a lot of discussions going on at different levels, including with members of the incoming government’s transition committee.”