Nigeria’s Finance Minister Zainab says Government is considering a transport subsidy for its poorest families to cushion the effects of an “eventual” removal of a petrol subsidy.
Addressing reporters after a cabinet meeting in Abuja, Ahmed said the government planned to remove the petrol subsidy by the middle of next year and replace it with 5,000 naira monthly payments to the poorest families.
The transport intervention will be for between 20 to 40 million people and would run for a period of six to 12 months.
Ahmed said the petrol subsidy was meant to end this June as per the country’s 2020 budget. At the last revenue count this month, the subsidy cost the government 243 billion naira per month, which has been increasing consistently.
She added that failure to end petrol subsidy will cost Nigeria 3 trillion naira or $7 billion a year, and that the country is getting to a point where state-oil company, NNPC will remit virtually nothing to the government after subsidy payments.
On Tuesday, the World Bank urged Nigeria to end its costly petrol subsidy within the next three-to-six months, improve exchange-rate management and speed up other reforms to boost growth.
Nigeria has fallen behind on implementing reforms started at the height of the COVID-19 pandemic, the bank said, adding that growth rates will lag those of other emerging economies, unless momentum is restored.
It projects Nigeria’s GDP to grow 2.4% this year, after the economy grew just over 4% in the third quarter, its fourth consecutive quarterly rise, following the COVID-19-induced recession in 2020.
The finance minister said the government wanted to expand the economy to a point where growth exceeds population growth. She said annual economic growth this year averaged to 3.3%, slightly higher than population growth of 3.2%.
