TheWorld Bank Country Director for Nigeria, Mr. Shubham Chaudhuri, on Tuesday, backed the planned removal of subsidy on Petroleum Motor Spirit (PMS), suggesting that it may not remarkably cause a spike in inflation.
Chaudhuri said historical data, including statistical analyses carried out by the World Bank, have not shown that there would be a remarkable rise in inflation if Nigeria removes fuel subsidy leading to increase in the price of PMS.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, announced recently that the Federal government would scrap the controversial social scheme next year and replace it with N5,000 monthly transportation grants to about 40 million poor Nigerians for a period of one year.
Ahmed’s announcement has raised fresh debate on the subsidy scheme, which the government said it gulps trillions of naira monthly.
Predictably, Labour, the organised private sector (OPS) and other stakeholders have described the proposal as absurd.
The Nigerian Labour Congress (NLC) said the plan is an open invitation for unrest and revolt, while the Trade Union Congress (TUC) expressed shock that government could come up with the idea when negotiations on subsidy removal are yet to be concluded.
The Senate, on its part, said the grant proposal was not captured in the 2022 budget, wondering how the government intends to implement it.
Although Chaudhuri failed to disclose the subsidy exit strategy, he was certain the programme is not sustainable anymore even though there is ‘no answers’ to the lingering questions it has raised.
He, thus, suggested a healthy dialogue as a necessary route to achieving “a national consensus” on the exit strategy and how to manage the impacts its eventual removal could leave on struggling Nigerians. He insisted that the scheme does not benefit the majority of poor Nigerians, as most public transport vehicles run on diesel.
– Media Report