FG Announces Date to Begin Gradual Removal of Fuel Subsidy

The Federal Government has said that it would begin a gradual removal of fuel subsidy from April 2023.

Mrs Zainab Ahmed, Minister of Finance, Budget and National Planning, stated this on Tuesday during an interview with ARISE TV on the sidelines of the World Economic Forum in Davos, Switzerland.

The minister added that the subsidy removal appeared to be the position of all contestants to the leadership of the country in their political campaigns for next month’s general elections.

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She said:

What will be safer is for the current administration to, maybe at the beginning of the second quarter, start removing the fuel subsidy, because it’s more expedient if you remove it gradually than to wait and move it all in one big swoop.”

The development came about three months ahead of the initial plan to effect a complete stop to the expenditure head.

The World Bank and the International Monetary Fund had explained that the removal of fuel subsidies was one of the fiscal reforms urgently needed to lift Nigeria’s development outcomes, which are severely constrained by the inefficient use of resources.

Its president, Mr David Malpass spoke while commenting on a World Bank report launched in November last year, titled: “Nigeria Public Finance Review: Fiscal Adjustment for Better and Sustained Results.”

Malpass had said:

Nigeria’s government urgently needs to strengthen fiscal management, create a unified, stable market-based exchange rate, phase out its costly, regressive fuel subsidy and rationalize preferential trade restrictions and tax exemptions.”

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