Zainab Ahmed, Nigeria’s Finance Minister, says the Nigerian government has no plan to remove fuel subsidy “at this time”.
She also said the government is in discussion with the World Bank Power Sector team on the $1billion Performance Based Loan (PBL) from multilateral institutions.
The finance minister said this at a joint news conference with Central Bank of Nigeria (CBN) Governor Godwin Emefiele, at the end of the 2019 World Bank/International Monetary Fund (IMF) Spring Meetings in the United States.
She said: “We met with the World Bank Power Sector team and discussed the way forward on the proposed $1billion PBL. We agreed to bring relevant MDAs together to ensure that we advance this operation in a timely manner. We will also discuss the Country Portfolio Performance of Nigeria, which currently stands at $9.8billion, with the Nigerian Country team at the World Bank and how we could manage the portfolio for optimum results.”
She spoke of plans by the Debt Management Office (DMO) to issue N15billion Green Bond to fund agriculture, power, health and water amenities to make life better for the people, saying the Green Bond will be the second one and would be used to finance agriculture, power sector – mostly solar projects – as well as some projects in the water sector.
She pointed out that the projects for which the funds will be applied “must be green”.
“They must be projects that are not contributing to carbon dioxide emissions to the society. The first green bond issuance was successful and all the projects that were scheduled to have been financed have been done and the projects are at various levels of completion,” she added.
On fuel subsidy, Ahmed said there was no plan by the government to remove fossil fuel subsidies.
She said: “We are here to discuss with the global community on various policy issues. One of the issues that always come up, especially in the IMF Article IV, is how we handle fuel subsidy.
“So, in principle, the IMF would say fuel subsidies are better removed so that you can use the resources for other important sectors, which is good advice, but in Nigeria, we do not have any plans to remove fuel subsidies at this time, because we have not yet designed buffers that will enable us to remove the subsidy and provide cushions for our people.
“So, there is no plan to remove fuel subsidy. We will be working with various groups to find out the best approach if we have to. We discussed this very frequently at the Economic Management Team, but what is the alternative? We haven’t yet found viable alternatives. So, we are not yet at the point of removing fuel subsidies.”