The federal government has disclosed that it has secured a World Bank facility worth $800 million to attend to a segment of post-petroleum subsidy palliatives requirement in the country.
This was just as it stated that discussions are also on between the present administration and the in-coming government on modalities for the removal of fuel subsidy by middle of this year.
Speaking with newsmen yesterday, after the weekly Federal Executive Council (FEC) meeting presided over by President Muhammadu Buhari, at the State House, Abuja, Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, disclosed that the $800 million was first tranche of palliatives to be disbursed through cash transfers to about 50 million Nigerians, who belong to the most vulnerable category of society.
According to her: “When we were working on the 2023 Medium Term Expenditure Framework and the Appropriation Act, we made that provision to enable us exit fuel subsidy by June 2023. We’re on course, we’re having different stakeholders’ engagements, we’ve secured some funding from the World Bank, that is the first tranche of palliatives that will enable us give cash transfers to the most vulnerable in our society that have now been registered in a national social register.
“Today that register has a list of 10 million households. Ten million households is equivalent to about 50 million Nigerians.”
She added that government was ready to go beyond cash transfer to cushion the effect the subsidy removal would have on Nigerians.
Her words: “We also have to raise more resources to enable us do more than just the cash transfers and also in our engagements with the various stakeholders, the various kinds of tasks that we have go beyond the requirement of just giving cash transfers. Labour, for example, might be looking for mass transit for its members.
“So there are several things that we’re still planning and working on, some we can start executing quickly, some are more medium-term implementation.”
On how much funding was received from the World Bank for the execution of the planned exit, Ahmed said, “$800 million for the scale up of the National Social Investment Programme at the World Bank and it’s secured, it’s ready for this disbursement.”
Asked if the incumbent government had been discussing subsidy removal with the incoming administration, the Minister said “there are a lot of discussions going on at different levels, including with members of the transition committee of the incoming government.
“On the secondary question on exit of fuel subsidy, this is a commitment in the Petroleum Industry Act. There’s a provision that says 18 months after the effectiveness of the PIA, all petroleum products must be deregulated, that 18 months takes us to June 2023.”
Ahmed had said the federal government would remove the controversial petrol subsidy before the end of Buhari’s tenure on May 29, 2023.
She had attributed the delay in removal of the subsidy, as provided for in the PIA 2021, to the 2023 general election and the forthcoming national population census.
She had said subsidy removal was a difficult political and economic decision for the government to take.
She had said subsidy cost per litre of petrol ranged between N350 to N400, maintaining that Nigeria spends about N250 billion monthly on subsidy.
The PIA signed into law on August 16, 2021 by Buhari provides for total deregulation of the downstream sector, which implies the removal of subsidy and enthronement of a free market regime for the sector.
But in January 2022, the federal government kicked that section of the PIA aside and postponed subsidy removal to end of June 2023. The government cited the pains subsidy removal would bring on the poor and vulnerable masses.