To mitigate the effects of subsidy elimination, President Muhammadu Buhari has written to the Senate asking for permission to borrow $800 million from the World Bank.
This comes after the Federal Government in April announced a $800 million World Bank grant that was intended to help 10 million households or 50 million poor Nigerians as part of its subsidized palliatives efforts.
According to Zainab Ahmed, Minister of Finance, Budget, and National Planning, the grant is being disbursed in anticipation of the expected elimination of subsidies in June 2023.
In order to advance the palliative program, which takes into account the demand for buses among other factors, Ahmed emphasized that continued interactions with the newly constituted Presidential Transition Council (PTC) and the future administration are ongoing.
‘Indifferent Attitude’
A non-governmental organization, the Civil Society Legislative Advocacy Centre (CISLAC), bemoaned the Buhari administration’s “nonchalant attitude” toward the catastrophic financial problem of the nation in light of the World Bank loan request on Friday.
Auwal Musa-Rafsanjani, the Executive Director of CISLAC, questioned the Federal Government on the loan request and added that borrowing to pay for post-fuel subsidy withdrawal palliatives is odd.
He wondered “if the fuel subsidy removal process has been suspended, as announced by the Minister of Finance after the NEC meeting at the end of April, then the government should return the borrowed money because what are we taking the loan for?”
No Subsidy Elimination?
The National Economic Council (NEC) postponed the scheduled removal of petroleum subsidy by the conclusion of the Buhari presidency on April 27.
The NEC is made up of the 36 state governors, the Governor of the Central Bank of Nigeria (CBN), and other government officials who have been co-opted.
The finance minister, who announced the decision, indicated that the council agreed in its recently finished meeting that the timing of the measure was not favorable.
According to her, the NEC debated on the issue and decided that it could not be removed for the time being.
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She noted that it was also agreed on the importance of continuing the conversation and the necessary preparation work in collaboration with states and representatives of the new administration.
Fears of the government receiving another $800 million loan from the World Bank, according to Rafsanjani, send waves of worry across Nigerians’ thoughts, since Nigeria’s revenue collection in 2022 stood at N10 trillion, with a debt of almost N77 trillion.
