IMF tells Nigeria to remove fuel subsidy

NEWS

Christine Largade, the Managing Director of the International Monetary Fund called on the Federal Government to remove fuel subsidy.

The IMF boss while addressing a press conference at the on-going joint annual spring meetings with the World Bank said that it was very important for fuel subsidy to be removed due to the low revenue mobilization in Nigeria in terms of tax to Gross Domestic Product.

She maintained the fact that the country would be able to invest in other sectors like health, infrastructure, education.

Despite the fact that the removal of fuel subsidy has been a very sensitive issue to Nigerians, Largade still insisted that the best thing to do was for Nigeria to remove fuel subsidy completely.

“I will give you the general principle. For various reasons and as a general principle, we believe that removing fossil fuel subsidies is the right way to go. If you look at our numbers from 2015, it is no less than about $5.2tn 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 lives, if there had been the right price on carbon emission as of 2015. Numbers are quite staggering.

“I would add as a footnote as far as Nigeria is concerned that, with the low revenue mobilisation 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.” She said.

The Nigerian National Petroleum Corporation spent a sum of #623.16bn on fuel subsidy between January to November 2018.  Largade said that 70 percent of the global economy was decelerating and as a result the Bretton Wood institution had cuts its forecast across the board.

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