World Bank Queries N6.7 Trillion Petrol Subsidy, Commits $8.5 Billion To Nigeria

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World Bank Group President Jim Yong Kim makes remarks at the Plenary Session of the IMF and World Bank's 2017 Annual Fall Meetings, in Washington, U.S., October 13, 2017. REUTERS/Mike Theiler - RC1820C71280

The World Bank is set to commit the sum of $8.5 billion to Nigeria as funding meant to target critical sectors like the education and agricultural sectors.

This position was disclosed by the World Bank Country Director to Nigeria, Shubham Chaudhuri during a summit organized by the Emergency Coordination Center held on Thursday, August 4, 2022.

Chaudhuri also noted that the amount was the largest of any country.

The world bank rep, however, queried the decision of the Buhari-led administration to mop up about N6.5 trillion of its scarce financial resources to subsidize petrol.

While announcing the $8.5 billion funding for the country, Chaudhuri noted that the amount was still infinitesimal compared with the needs of Nigeria, but some part of the funds – around $2.5 billion to $3 billion has been channeled towards education.

Recall Nigeria at the moment, is currently mobilizing the sum of N6.5 trillion which it aims to use in funding petrol subsidy.

World Bank Queries N6.7 Trillion Petrol Subsidy, Commits $8.5 Billion To Nigeria

According to estimates, the federal government has spent a total of N10.413trn on fuel subsidies between 2006 and 2019.

Another data of subsidy payments as seen in an NNPC (Nigerian National Petroleum Company Ltd) document shows that subsidy payments grew by 349.42 per cent from N350bn in 2019 to N1.573trn in 2021.

According to an authority in this field, Professor of Energy Economics at Nnamdi Azikiwe University, Uche Nwogwugwu, he agreed that the removal of subsidy would be good for the country’s economic growth.

However, he warned that in this current situation and time, removing the petrol subsidy would cause untold hardship and social unrest for Nigerians.

On the way forward, he commended the recent switch made by the NNPC into a limited liability company that can seek profit.

He added that with this position, it would be easier to remove subsidy as profit made by the now incorporated NNPC will cushion some of the expected economic downturns associated with the subsidy removal.