The International Monetary Fund has advised the federal government to remove both the fuel and electricity subsidies.
The incumbent government claimed to have removed fuel subsidies. However, speculation is rife that subsidy payment for the Premium Motor Spirit is still ongoing with its latest move to embrace partial cost-reflective tariff in electricity sector facing widespread opposition.
IMF’s advice was contained in a report it recently published, where the organisation posited that subsidies would gulp three per cent of the nation’s Gross Domestic Product in 2024 as against one per cent in the year before.
The development bank, however, paid tribute to the Nigerian government for, among other things, phasing out “costly and regressive energy subsidies”.
It said the step was critical to creating fiscal space for development spending and strengthening social protection while maintaining debt sustainability.
