The federal government of Nigeria has announced plans to begin the removal of fuel subsidy earlier than the planned date of June 2023.
In the 2023 budget recently signed by President Muhammadu Buhari, there is a provision for subsidy payment from January to June 2023.
On Tuesday while speaking at the world economic forum, Zainab Ahmed, Nigeria’s Minister of Finance, Budget and National Planning revealed a gradual phasing out of petrol subsidy payments from April, instead of removing it in one fell swoop in June.
Ahmed further posited that she wasn’t feeling ‘betrayed’ by the refusal of President Muhammadu Buhari to remove subsidy payments, having stuck out her neck on the issue for years without much success.
“Where there is not enough revenue for the government to buy the refined petroleum products, we have had to borrow to buy the petroleum products. So, if we take that out, that’s about N3.25 trillion. That is a significant relief, that we don’t incur any more than that number that we projected for in 2023.”
On the general economy she noted that although the projected global economic recession for 2023 appeared inevitable, with about $34 billion in the nation’s foreign reserves, the projected headwinds shouldn’t pose much threat to Nigeria.
Ahmed noted that at $34 billion, it was enough to sustain imports for six months.
“It is true we had higher reserves during the first global recession. Our reserves are now at $34 billion. So that is still a healthy level. It means we’re able to meet at least six months of imports and other expenses into the country.
“It means we can withstand another global shock if we’re able to carry through a coordinated response between the monetary, fiscal as well as trade authorities. We have learned a lot from the experience that we went through during the COVID. And it showed that when we plan as one, we can actually withstand the shocks,” she explained.
