The International Monetary Fund (IMF) has counselled the Nigeria government to remove fuel subsidy and utilize the money for the provision of social amenities for the country.
The managing director of IMF, Christine Lagarde, in a press conference at the ongoing joint annual spring meetings with the World Bank in Washington DC, said the removal of subsidy will make Nigeria have enough fund to provide the needs of its citizens.
Stating that the country’s generated revenue is low, Lagarde said: “I will give you the general principle, for several reasons and as a general principle; we believe that removing fossil fuel subsidies is the right way to go.”
“I would add as a footnote 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.
“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.”
She further noted that the constant payment of fuel subsidy could lead to a lack of social protection safety net for the people.
“Now, how this is done is the more complicated path 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