World Bank Supports FG’s Subsidy Removal, Forex Policy

……recent speech by President Bola Tinubu, where he advocated for these measures.

By Johnson Eniekenemi: 

The World Bank has expressed its endorsement of the Federal Government’s decision to eliminate subsidies and unify the exchange rate in the country. This announcement follows a recent speech by President Bola Tinubu, where he advocated for these measures.

During a World Bank event on Tuesday, aimed at evaluating Nigeria’s economy in the past six months, Dr. Subham Chadhuri, the Country Director, emphasized the importance of this policy despite the anticipated hardships. He also called for measures to alleviate the impact on the population going forward.

Dr. Chadhuri revealed that the World Bank currently provides concessional funding to Nigeria exceeding ten billion dollars, demonstrating the organization’s commitment to supporting the country’s economic reforms.

Furthermore, Alex Seinart, a lead economist at the World Bank, projected that the removal of fuel subsidies would result in fiscal gains estimated at approximately 3.9 trillion Naira in 2023. Seinart cautioned that the subsidy removal might lead to a temporary rise in inflation in the coming months but predicted that it would contribute to a decrease in inflation in the medium term.

Regarding the exchange rate, the senior economist highlighted that the previous approach to foreign exchange management impeded investment and economic growth, contributed to inflation, and undermined the effectiveness of monetary and fiscal policies.

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