By Ola Kay
The International Monetary Fund, IMF, has cautioned the Federal Government to refrain from what it called implicit fuel and electricity subsidies in the country.
In its recently published report, the international financial institution pointed out that the subsidies in Nigeria would eat up about three per cent of the nation’s Gross Domestic Product, GDP in 2024, as opposed to one per cent recorded in 2023.
In its projection, the IMF stated that the implicit fuel subsidy could gulp as high as N8.4 trillion in 2024 from N1.85 trillion in 2023, N4.4 trillion in 2022, N1.86 trillion in 2021 and N89 trillion in 2020.
The report by the international body said, “Costly and regressive energy subsidies”, iwas critical “to creating fiscal space for development spending and strengthening social protection while maintaining debt sustainability.
While also noting that, “As inflation subsides and support for the vulnerable is ramped up, costly and untargeted fuel and electricity subsidies should be removed, while, e.g., retaining a lifeline tariff.”
In June 2023, the federal government announced the withdrawal of fuel subsidy.
Also, in April 2024, the Nigerian Electricity Regulatory Commission, NERC declared ed a 240 per cent hike in electricity tariff for what it categorized as Band A customers level, with assurance of getting 20-24 hours of power supply.
But a wide condemnation from the Nigerian public led a recent minor adjustment it announced, while the labour unions have insisted that the previous electricity rate should be maintained.
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