Zainab Ahmed, Minister of Finance, has said the Federal Government has not yet contemplated removing fuel subsidy in the country.
Ahmed made this known during a ministerial press briefing at the 2019 International Monetary Fund and World Bank Spring Meetings in Washington DC, the United States capital.
Speaking against the backdrop of the recommendation by Christine Lagarde, Managing Director of the International Monetary Fund (IMF), last week that Nigeria should remove its subsidies on fuel, Ahmed said that while the advice was a sound one, there is no imminent plan by the Federal Government to implement such counsel yet.
The Finance Minister said the subsidy could not be removed as the government had not yet devised alternative arrangements to mitigate the impact on Nigerians once it is withdrawn.
She said: “There is no imminent plan to remove fuel subsidy. We are here to discuss with the global community on various policy issues. One of the issues that always come up in the report, especially the IMF World Economic Outlook report, is how we handle fuel subsidies. So, in principle, the IMF will say fuel subsidies are better removed so that we can use the resources for other important sectors. And in principle, that is a fact to do so.
“But in Nigeria, we don’t have any plan to remove fuel subsidy this time because we have not yet designed buffers that will enable us to remove subsidy and provide cushions for our people. So, there is no plan to remove fuel subsidy. We will be working with various groups to find out what needs to be done if we have to remove fuel subsidy. What is the alternative? We haven’t yet found viable alternatives. So, we are not at the point of removing fuel subsidy.”
Ahmed added that the Federal Government would need to come up with alternatives that are implementable and also sensitize Nigerians on why the subsidy on fuel is being removed when a plan is finally drawn up and approved.
She said, “To the IMF, we just came out of the Article IV review. 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.
“The advice from the IMF on fuel subsidy removal was good advice 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 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.”