The Federal Government on Thursday agreed with the International Monetary Fund (IMF) on subsidy removal, saying the advice of the Fund is good but has to be implemented in a successful and sustainable manner.
Zainab Ahmed, minister of finance said this at the ongoing 2019 World Bank/IMF Spring meetings in Washington DC.
IMF had earlier in the day and also in its Article IV asked Nigeria to remove its subsidy and direct investment to health, education and infrastructure.
“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”, Ahmed said.
Continuing she said, “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”.
The Washington based Fund recommended the creation of a social protection safety net so that the most exposed in the population do not take the brunt of the removal of the subsidies.
On the Article IV review, the minister said, “the review was a positive one and had good advice from the IMF to Nigeria and they have indicated that they are available to provide technical support to improve our liquidity management, our debt management and other fiscal measures”.
Reacting to IMF ranking of Nigeria second worse in the use of sovereign wealth fund, Ahmed said, “the president has directed that we look at every area that requires reforms. I would say that the Sovereign Wealth Authority has been doing well 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 at the Sovereign Wealth Authority for projects that are physically visible. We still have some movements to go but the movement is a positive one”.
Source: By Hope Moses-Ashike & Onyinye Nwachukwu