June 19, 2024

Nigeria gets World Bank funding for social program ahead of fuel subsidy cut


Nigeria has received $800 million from the World Bank to expand its national social program as it prepares to phase out costly petrol subsidies in June.

Africa’s largest economy has allocated 3.36 trillion nairas ($7.3 billion) for petrol subsidies, which will be in effect until mid-2023. However, there are no provisions for the expense beyond that time, despite it costing more than healthcare and education combined.

The government is considering cash transfers and mass transit buses for workers to reduce the impact of subsidy removal on the most vulnerable members of society.

According to the Finance Minister, the government has identified ten million households, equivalent to 50 million people, as part of its vulnerable list, and there are still several plans in the works.

The COVID-19 crisis was predicted by the World Bank in 2021 to result in over 11 million Nigerians falling below the poverty line by 2022, bringing the total number of impoverished individuals in the country to over 100 million. This figure represents more than half of the estimated 200 million population.

Currently, there are discussions among various levels of government regarding the removal of fuel subsidies. The incoming administration of President-elect Bola Tinubu is also involved in these talks.

Recently, Labour Minister Chris Ngige suggested that after the removal of the fuel subsidy in June, public sector workers should receive pay increases under Tinubu’s new administration, which begins in May following Buhari’s departure.

Although the Nigerian government receives billions of dollars annually from oil exports, many citizens view cheap subsidised fuel as one of the few benefits they receive from the state. This is due to the government’s failure to provide essential services such as electricity and security.

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