Zainab Ahmed, minister of finance, budget and national
planning, says Nigeria will remove fuel subsidies by 2022 and replace them with
N5000-a-month transportation grant to the poorest Nigerians.
Speaking at the launch of the World Bank Nigeria Development
Update (NDU) on Tuesday, the minister said the grant will go to about 30 to 40
million Nigerians who make up the poorest population of the country.
She said the final number of beneficiaries will depend on
the resources available after the removal of the fuel subsidy.
“The subsidies regime in the [oil] sector remains
unsustainable and economically disingenuous,” she said.
“Ahead of the target
date of mid-2022 for the complete elimination of fuel subsidies, we are working
with our partners on measures to cushion potential negative impact of the
removal of the subsidies on the most vulnerable at the bottom 40% of the
population.
“One of such measures would be to institute a monthly
transport subsidy in the form of cash transfer of N5,000 to between 30 – 40
million deserving Nigerians.”
The World Bank in the development update had said the
poorest 40% in Nigeria consume less than 3% of the total PMS in the country,
highlighting that the rich were benefiting more from the subsidies.
“We are very
optimistic that the recent developments in the oil sector, such as the
Petroleum Industry Act (PIA) 2021, hopefully, the full reactivation of the 4
public refineries in the country, and the completion and coming on stream of
the 3 private refineries under construction in 2022, would significantly boost
contribution from the sector to our economic growth efforts,” Ahmed added.
“I agree with the Report that with the expansion of social
protection policies during the pandemic, the government has an opportunity to
phase out subsidies such as the PMS subsidy while utilizing cash transfers to
safeguard the welfare of poor and middle-class households.”
Ahmed said this move is set for June 2022, but the federal
government hopes to do this before June — in line with the Petroleum Industry
Act (PIA).
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