The World Bank has given reasons for supporting the Federal Government’s decision to remove subsidies and unify the country’s exchange rate.
The Country Director, Dr. Subham Chadhuri made this known during an event organised by the World Bank to assess Nigeria’s economy over the past six months today.
Dr Chadhuri hinted that the World Bank’s concessional funding to Nigeria currently amounts to over ten billion dollars, underscoring the organisation’s commitment to supporting the country’s economic reforms.
He emphasised that although the policy would be painful, it is essential for rebuilding the nation’s economy and also called for measures to mitigate the impact on the population moving forward.
Also speaking at the event, a lead economist at the World Bank, Alex Seinart, estimated that the removal of fuel subsidies would yield fiscal gains estimated at about 3.9 trillion Naira in 2023.
Seinart also warned that the subsidy removal might lead to a temporary increase in inflation in the coming months but predicted it would contribute to disinflation in the medium term.
Lending his voice to the unification of exchange rate, the senior economist said the previous foreign exchange management approach hindered investment and economic growth, contributed to inflation, and undermined the effectiveness of monetary and fiscal policies.
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President Bola Ahmed Tinubu had earlier told a delegation of AfreximBank Executives in Paris that they “must stimulate recovery for the growth and prosperity of our people, which will not be far away. Nigeria is ready for global business and our reform is total.”
He also noted that boldness and courage are required to reposition the economy. Calling for more collaboration to solidify the economy, Tinubu told the delegation that “Nigeria is blessed with human and material resources.”
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