Breaking: IMF Urges Nigeria Government To End Fuel And Electricity-Subsidies

Breaking: IMF Urges Nigeria Government To End Fuel And Electricity-Subsidies

The International Monetary Fund (IMF) has advised the Nigerian government to discontinue what it termed implicit fuel and electricity subsidies. According to a recent report by the Washington-based institution, these subsidies are projected to consume three per cent of the nation’s gross domestic product (GDP) in 2024, compared to one per cent the previous year.

Read Also: https://ireporteronline.com.ng/blog/breaking-imf-urges-nigeria-government-to-end-fuel-and-electricity-subsidies/

The IMF estimates that the implicit fuel subsidy could amount to as much as N8.4 trillion in 2024, a significant increase from N1.85 trillion in 2023, N4.4 trillion in 2022, N1.86 trillion in 2021, and N89 trillion in 2020. These, it described as “costly and regressive energy subsidies”, emphasizing that removing them is crucial for creating fiscal space for development spending and strengthening social protection while maintaining debt sustainability.

The Nigerian government had announced the removal of fuel subsidy in June last year. Similarly, in April 2024, the Nigerian Electricity Regulatory Commission announced a 240 per cent increase in electricity tariffs for Band A customers, who receive 20-24 hours of power supply. However, following public outcry, a recent minor reduction was announced.

Published By: Destiny.Jnr