President Muhammadu Buhari has sent a letter to the Senate seeking approval to take a loan to the tune of $800 million from the World Bank to cushion the effects of subsidy removal.
As part of its subsidized palliatives measures, the Federal Government had previously announced in April that it will receive a $800 million grant from the World Bank to assist 10 million households or 50 million poor Nigerians.
The grant’s disbursement, according to Zainab Ahmed, Minister of Finance, Budget, and National Planning, is in anticipation of the scheduled elimination of subsidies in June 2023.
To advance the palliative program, which involves the need for buses among other things, Ahmed emphasized that conversations are still happening with the newly constituted Presidential Transition Council (PTC) and the future administration.
In light of the World Bank loan request, a non-governmental organisation, the Civil Society Legislative Advocacy Centre (CISLAC) on Friday lamented what he described as the nonchalant attitude displayed by the Buhari administration towards the country’s crippling debt crisis.
The Executive Director of CISLAC, Auwal Musa-Rafsanjani, queried the Federal Government over the loan request, adding that borrowing to fund post-fuel subsidy removal palliatives is strange.
He wondered “if the fuel subsidy removal process has been suspended as announced by the Minister of Finance after the NEC meeting at the end of April, then the government should return the borrowed money because what are we taking the loan for?”
Rafsanjani argued that fears of the country getting another $800 million loan from the World Bank sends waves of worries in the minds of Nigerians as Nigeria’s revenue collection in 2022 stood at N10 trillion, with a debt of about N77 trillion.
The National Economic Council (NEC) on April 27 suspended the planned removal of subsidy on petroleum products by the end of the Buhari administration.
The NEC comprises the 36 state governors, the Governor of the Central Bank of Nigeria (CBN), and other co-opted government officials.
The finance minister, who announced the decision, stated that the council concluded in its recently concluded meeting that it was not a favourable time for the action.
According to her, the NEC deliberated on the matter and resolved that it cannot be removed for now.
She added that it equally agreed on the need to continue the discussion on the matter and the necessary preparatory work in conjunction with states and representatives of the incoming administration.