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World Bank: removal of fuel subsidy in Nigeria, an important step
By Modupe Shodeinde
The World Bank on Thursdays had termed the removal of fuel subsidy in Nigeria an important step in structural reformation during the pandemic.
The bank in its Africa Pulse Report, titled “Charting the way to recovery” has commended countries in the sub-Saharan region for taking opportunities presented by the pandemic in enabling structural reform agenda.
“The COVID-19 crisis is not being wasted among countries in the region… In Nigeria, the government has taken important steps to reform its subsidy regime,” it said.
It reported that the Nigerian government had removed fuel subsidy and established a market-based pricing mechanism with no price ceilings.
The gasoline (petrol) price is set monthly by the Petroleum Products Pricing Regulatory Agency from market-based costs.
“When international petroleum product prices start to recover, the PPPRA will allow price increases accordingly.”
The report stated that the pandemic is pushing the sub-Saharan region into its first recession in 25 years. It projected that sub-Sahara Africa’s real GDP would contract by 3.3 per cent this year, after expanding by 2.4 per cent in 2019.
“In Nigeria, after expanding 1.9 per cent year-on-year in 2020 Q1, real GDP contracted by 6.1 year-on-year in 2020 Q2, with growth in the oil and non-oil sectors falling.” it said.
According to the World Bank Vice President for Western and Central Africa, Ousmane Diagana, charting the course to rapid recovery across countries in the sub-Saharan region would require massive investments and advanced structural reforms.
“The recovery journey will be difficult, but without the advancement of structural reforms, robust growth post-pandemic will be even more challenging.” he said.
