World Bank pledges support for Nigeria’s plan to end fuel subsidies

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Vice President Yemi Osinbajo was in the United States of America seeking global partnerships and support for the newly inaugurated Nigeria Energy transition plan.

Osinbajo also met with US Vice President, Kamala HarrisU.S. Secretary of Energy, Jennifer Granholmand Secretary of the Treasury, Janet Yellen.

The World Bank chief also called for a unified exchange rate in Nigeria, a move he said would significantly improve Nigeria’s business-friendly environment, attract foreign direct investment and reduce inflation.

As seen in a statement on the World Bank’s website, “President Malpass encouraged a decisive move towards unification and stabilization of the exchange rate by Nigeria, pointing to the economic benefits for the Nigerian people. President Malpass stressed to Vice President Osinbajo that a unified exchange rate will significantly improve the business environment in Nigeria, attract foreign direct investment and reduce inflation.

In the first half of 2022, petrol subsidy applications amounted to N2.6 trillion. This figure was higher than the revenue from crude oil sales of the Nigerian National Oil Company (NNPC) Limited during the same period.

Earlier this month, a Senior Public Sector Specialist, Domestic Resource Mobilization, World Bank, Rajul Awasthi described the subsidy issue as “an existential threat” and issued several warnings about the need to end it.

Awasthi had also described Nigeria as being in an unfavorable economic situation due to declining incomes, the continued payment of trillions of naira in fuel subsidies by the government and the resulting economic challenges.

With the FG’s decision to end grant payments by June 2023, the World Bank’s intervention will speed up the process and also cushion the economic downturn that will occur during the transition process.

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