FINANCE minister Zainab Ahmed has agreed to work on the recent advice given to the Nigerian government by the International Monetary Fund (IMF) to end its petroleum subsidies and invest that money in social services.
Earlier this week at the IMF/World Bank Spring Meeting in Washington DC, Tobias Adrian, the financial counsellor and director of monetary and capital markets development at the IMF, urged Nigeria to stop spending money on petroleum subsidies. According to the IMF, the expenditure was wasteful and Nigeria was better off spending the money on healthcare, education and infrastructural developments like roads.
Responding to the advice, Mrs Ahmed, said: “The advice from the IMF on fuel subsidy removal was a good one but also we have to implement it in a manner that is both successful and sustainable. We are not in a situation to wake up one day and just remove the subsidy.
“We have to educate the people, we have to show Nigerians what the replacement for those subsidies will be, so, we have a lot of work to do. We also need to understand that you don’t remove large amounts of subsidy in one go, it has to be graduated and the public has to be well-informed on what you are trying to do.”
While in Washington, Mrs Ahmed met with the IMF and reviewed its Article IV Consultation with Nigeria report, which she said was positive. According to Mrs Ahmed, the IMF has indicated to Nigeria that they are available to provide technical support to improve liquidity management, debt management and other fiscal measures.
Data from Nigeria’s Debt Management Office (DMO) shows that the country’s total public debt rose to N24.39trn ($79.44bn) as of at December 31, 2018 representing a year-on-year growth of 12.25%. Nigeria’s 2018 debt stock is thus higher than that of 2017 by N2.662bn and Mrs Ahmed said President Muhammadu Buhari has directed her ministry to look at every area that requires reforms.
She added: “I would say that the Sovereign Wealth Authority has been doing well because if you look at where we are starting from, we have achieved quite a lot of progress by building more of the fund from where we met it and by utilising the savings for projects that are physically visible. We still have some movements to go but the movement is a positive one.”
According to Mrs Ahmed, the federal government has asked the World Bank to review some of the initiatives that it has put in place, including those that involve looking at implementation systems on areas that are providing funding for infrastructure. She added that that the Environmental and Social Standards put in place by the World Bank is causing significant delays in the rollout of infrastructure.