Final hours! Save up to 55% OFF InvestingProCLAIM SALE

Nigeria gets World Bank funding for social program ahead of fuel subsidy cut

Published 04/05/2023, 11:23 AM
Updated 04/05/2023, 12:42 PM
© Reuters. FILE PHOTO: A participant stands near a logo of World Bank at the International Monetary Fund - World Bank Annual Meeting 2018 in Nusa Dua, Bali, Indonesia, October 12, 2018. REUTERS/Johannes P. Christo

By Felix Onuah

ABUJA (Reuters) -Nigeria has secured $800 million from the World Bank to scale up its national social program ahead of the removal of its costly but popular subsidies on petrol in June, Finance Minister Zainab Ahmed said on Wednesday.

Africa's biggest economy set aside 3.36 trillion naira ($7.3 billion) this year to spend on petrol subsidies until mid-2023, after which it has made no provision for the expense, which cost more than its spending on healthcare and education.

Ahmed said the government was considering cash transfers and mass transit buses for workers to ease the pain of the subsidy removal on the most vulnerable segment of its population.

She added that the country has registered ten million households, which is equivalent to 50 million people on its vulnerable list.

"Several things are still on plan," Ahmed told reporters in Abuja after the government's cabinet meeting.

"Some we can start executing quickly while some are of long-term implementation."

The World Bank said in 2021 it expected the COVID-19 crisis to push over 11 million Nigerians into poverty by 2022, taking the total number of people classified as poor in the country to over 100 million. The total population is estimated at 200 million.

Ahmed said discussions were going on at different levels of government and with members of the incoming administration of President-elect Bola Tinubu on the subsidy removal.

© Reuters. FILE PHOTO: A participant stands near a logo of World Bank at the International Monetary Fund - World Bank Annual Meeting 2018 in Nusa Dua, Bali, Indonesia, October 12, 2018. REUTERS/Johannes P. Christo

Last week, Labour Minister Chris Ngige recommended that Tinubu's new administration give public sector workers pay rises after removing a fuel subsidy in June. Tinubu will take office in May, when Buhari steps down.

Many Nigerians regard cheap subsidised fuel as at least one benefit they receive from the state, which fails to deliver other basic services such as electricity and security despite receiving billions of dollars every year from oil exports.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.