Following the removal of fuel subsidy, the International Monetary Fund (IMF) has urged the Federal Government of Nigeria to add one more, which is to completely phase-out electricity subsidy in the country. The advice is allegedly as a result of the economic challenges faced by Nigerians since the removal of fuel subsidies.
In its ‘Post Financing Assessment (PFA)’ report, the IMF acknowledged the hardship many Nigerians are facing, then suggested the removal of electricity subsidy in addition to the government’s move in restoring macroeconomic stability.
The report pointed out the significant financial impact of these subsidies, emphasised the need for Nigeria to overcome economic challenges, and create conditions for sustained and inclusive growth.
The report also detailed the scarcity of external financing, and the global surge in food prices that has contributed to the stalled per capita growth, high poverty rate, and food insecurity in Nigeria.
The IMF, after detailing the hardship Nigerians are going through because of the subsidy removal, still commended the government for the reforms undertaken so far; stating the removal of fuel subsidy, and unification of official exchange rates, as part of the positive steps taken.
Further recommendations given to achieve economic stability are continued focus on revenue mobilisation, digitalisation, and monetary tightening. It also recommended that the overall deficit in 2024 be reduced to contain debt vulnerabilities, and remove the need for Central Bank of Nigeria (CBN) financing.
Meanwhile the Nigerian Electricity Regulatory Commission (NERC) recently revealed that the government subsidised electricity in the first three quarters of 2023, and power distribution companies billed users a total of N1.06 trillion during this period, in spite of the widespread blackout. However, the companies only recorded N782.6 billion as income for the period.
Speaking with some stakeholders, Ireport247 got different responses: Ibukun, a fashion entrepreneur said: “do we call this confusion, or what? How could you say you are aware that a move the government made has caused a level of hardship for the citizens, yet you are recommending that the government add another subsidy removal. Is this a joke or what?!”
Ngozi, a young graduate said: “ it is true that these international bodies have no good intentions toward Africa, and Nigeria especially. Is the suffering not enough, or the inflation infinitesimal, that IMF is speaking from both sides of the mouth? On one hand they seemed to be empathic towards Nigerians, and on the other hand, they are cheering the government on in terms of inflicted hardship. They really are psychopaths.”
We hope the IMF will further clarify its stand regarding this communication.
