Nigeria – Sunday, 18 April 2021: Plans by the federal government of Nigeria to end both electricity and fuel subsidies by mid-2021 have been revealed.
The Nigeria Natural Resource Charter (NNRC) revealed the plans on Sunday quoting an International Monetary Fund (IMF) report.
According to NNRC, the report followed the conclusion of IMF’s Article IV consultation with Nigeria.
According to the IMF in the report, FG had promised to see to the end of tariff shortfalls that led to their re-emergence.
“They expressed strong commitment to prevent fuel subsidies from resurfacing and to fully eliminate electricity tariff shortfalls by mid-2021.
“They believe that lifeline tariffs and other relief measures are adequate to protect poorer households from increases in electricity prices and highlighted the benefits from higher and more predictable availability,” the report reads.
Although the Nigerian government had in March 2020 removed petrol subsidy, it however resurfaced following rise in price of crude oil at the international market.
On September 8, 2020, the Federal Government said its removal of petrol subsidy and the increase in electricity tariff were in agreement with reforms requested by the IMF and the World Bank as it seeks financial assistance of $3.4bn from IMF.
The President, World Bank, David Malpass had met with the Minister of Finance, Budget and National Planning and the Governor of Mr Godwin Emefiele, on April 8, where the need to eradicate energy subsidies among other issues were discussed.
“The recent introduction and implementation of an automatic fuel price formula will ensure fuel subsidies, which we have eliminated, do not re-emerge,” the Federal Government told the IMF in the letter of intent dated April 21, 2020.