‘Removing Fuel Subsidy Is The Right Way To Go’ – Lagarde Advises Nigerian Government
The Managing Director of the International Monetary Funds (IMF), Christine Largarde has asked the Nigerian Government to consider the complete removal of fuel subsidy.
Mrs Largarde made this statement while addressing a joint annual spring meeting of the World Bank in Washington DC, United States.
“We believe that removing fossil fuel subsidies is the right way to go,” Lagarde said.
“If that was to happen, then there would be more public spending available to build hospitals, to build roads, to build schools, and to support education and health for the people.” she added.
She also said the amount spent on subsidy was too much
“If you look at our numbers from 2015, it is no less than about $5.2 trillion that is spent on fuel subsidies and the consequences thereof,” she said.
“And the Fiscal Affairs Department has actually identified; you know how much would have been saved fiscally but also in terms of human life if there had been the right price on carbon emission as of 2015. The numbers are quite staggering.
“Now, how this is done is more complicated because there has to be a social protection safety net that is in place so that the most exposed in the population do not take the brunt of the removal of subsidies principle. So that is the position we take.”
She said it was important to remove the subsidy because of the low revenue mobilisation that exists in Nigeria in terms of tax-to-GDP.