CHRISTINE Lagarde, managing director of the International Monetary Fund, has advised Nigeria and other countries who subsidise fuel to stop.
Addressing the press on Thursday at the ongoing spring meetings of the International Monetary Fund and World Bank Group, Lagarde said $5.2 trillion has been spent by these countries since 2015. She said such money could have been spent on health and education.
Speaking on why the fuel subsidy should be removed, IMF director said: “If you look at our numbers from 2015, it is no less than about $5.2 trillion that is spent on fuel subsidies and the consequences thereof.
She added that the fiscal affairs department has actually identified how much would have been saved fiscally, as well as in terms of human life if there had been the right price on carbon emission as of 2015. Numbers are quite staggering.
“We believe that removing fuel subsidies is the right way to go,” The IMF chief said.
If that was to happen, she said there would be more public spending available to build hospitals, to build roads and to support health for the people. Lagarde also included that money would be available to build schools and to provide quality education for the citizens.
She advised that a social protection safety net be put in place before a country removes the subsidy.
“There has to be a social protection safety net that is in place so that the most exposed in the population do not take the brunt of the removal of subsidies principle. So that is the position we take.
“As far as Nigeria is concerned, with the low revenue mobilization that exists in the country in terms of tax to GDP, Nigeria is amongst the lowest.
The IMF director said a real effort has to be made in order to maintain a good public finance situation in Nigeria. Direct investment towards health, education, and infrastructure also need a real effort, she added.
Meanwhile, many states are still owing workers’ salaries and pensioners’ entitlements, according to the public record.
A recent survey by BudgiT showed that 17 states were still owing salaries and pensions as at October 2018. Though the situation may have been different due to promises made during campaigns ahead of the 2019 elections, workers of some states are still being owed several month salaries.
A litter of petrol is currently sold at N147.