BEVERLY HILLS, April 12, (THEWILL) – The International Monetary Fund (IMF) has urged Nigeria to remove fossil fuel subsidy and deploy savings from the scheme to fix social infrastructure.
IMF Managing Director Christine Lagarde gave the advice at the opening of the ongoing World Bank/IMF Spring Meetings in Washington DC .
She urged Nigeria to establish Social protection Safety Net to help the government meet the needs of people at the lower cadre of the society saying about $5.2 trillion has so far been spent on fuel subsidies.
“I will give you the general principle. For various reasons and as a general principle, we believe that removing fossil fuel subsidies is the right way to go.
“And the Fiscal Affairs department has actually identified how much would have been save financially, but also in terms of human life if there had been the right price on carbon emission as of 2015. Numbers are quite staggering.
“If that was to happen, then there would be more public spending available to build hospitals, roads, provide educational facilities and lift more people out of poverty.
“Now, how this is done is the more complicated path because there has to be a social protection safety net that is in place so that the most exposed in the population do not take the brunt of those removal of subsidies principle.
“So that is the position we take. I would add as a footnote as far as Nigeria is concerned that, with the low revenue mobilisation that exists in the country in terms of tax to Gross Domestic Product (GDP), Nigeria is amongst the lowest.
“A real effort has to be done in order to maintain a good public finance situation for the country. And in order to direct investment towards health, education, and infrastructure,” she said.