The World Bank says the cost of fuel subsidy in Nigeria has exceeded the government’s spending on health, education and social protection for Nigerians.
It therefore said that removing fuel subsidy would help the government towards its poverty reduction scheme.
The Washington-based lender said this in its latest Nigeria Development Update report, titled, ‘The Continuing Urgency of Business Unusual’, which was released on Tuesday.
The report read in part, “In 2021, Nigeria’s petrol subsidy cost around $4.5bn, or roughly two per cent of GDP, far exceeding federal government spending on health, education, and social protection.
“Therefore, diverting spending away from the petrol subsidy towards more pro-poor causes could help spread the gains of growth, which is essential for reducing poverty.”
According to the bank, Nigeria is not benefiting from high oil prices due to lower oil output and fuel subsidy cost.
In the area of transport, she said that the government is planning to help marketers that move diesel across the country with some form of relief. She added that the government was careful so that this relief does not transform form of subsidy.
She further said that Nigeria was not benefitting from oil revenues as the NNPC delivers zero revenue but asks for extra funds to finance fuel subsidy.
“NNPC is not just delivering zero revenue. We are also as a federation has to give them more money. The current subsidy regime imposed on us has gotten to a point where NNPC revenue is exhausted and they have to come to the federation to ask for more money. It is a very difficult situation,” she said.
The Governor of Anambra State, Prof Chukwuma Soludo, has also criticised the Federal Government for not removing fuel subsidy.