The Nigerian government says it has obtained $800 million from the World Bank which it plans to use as support for poor citizens impacted after the removal of subsidy of petrol.
The government faces a N3.3 trillion subsidy cost between January and June, a third of its total projected revenue for this year, and has said it will end subsidy payment this year.
The removal of the expensive expenditure was one of President Buhari’s major pledges when he took office in 2015, but the government repeatedly failed as energy prices rose. His successor, Bola Tinubu, who will be sworn into office on May 29, has also made a similar promise.
Fuel traders and analysts have however warned that the price of petrol may rise to N750 a litre from the current official rate of less than N200.
They said the price could be at N500 if Central Bank of Nigeria provides foreign exchange for marketers at the official rate.
The government said saved revenue will be channelled to development projects and to support the most vulnerable citizens.
– First tranche
Speaking to journalists on Wednesday after the cabinet meeting chaired by President Buhari, Minister Zainab said the government will use the World Bank credit to support a “segment of post-petroleum subsidy palliatives requirement”.
She said $800 million is the first tranche of palliatives to be disbursed through cash transfers to about 50 million Nigerians, who belong to the most vulnerable category.
“We’re on course, we’re having different stakeholders’ engagements, we’ve secured some funding from the World Bank,” she said regarding to subsidy plan, according to the News Agency of Nigeria.
She said the government obtained “$800 million for the scale up of the National Social Investment Programme at the bank and it’s secured, it’s ready for this disbursement”.
“That is the first tranche of palliatives that will enable us give cash transfers to the most vulnerable in our society that have now been registered in a national social register,” Ahmed said.
“Today that register has a list of 10 million households. 10 million households is equivalent to about 50 million Nigerians.”
– Less than N10,000
If applied as stated, $800 million shared to 50 million people translates to about N7300 apiece at the official exchange rate.
Zainab said the government was ready to go beyond cash transfer to cushion the effect the subsidy removal will have on Nigerians.
“We also have to raise more resources to enable us do more than just the cash transfers and also in our engagements with the various stakeholders,” she said.
“There are various kinds of tasks that we have go beyond the requirement of just giving cash transfers. Labour, for example, might be looking for mass transit for its members.
“So, there are several things that we’re still planning and working on, some we can start executing quickly, some are more medium-term implementation.”
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