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FG to pay 5000 to 40million Nigerians over Fuel subsidy removal

Nigeria will eliminate fuel subsidy by 2022, according to Zainab Ahmed, minister of finance, budget, and national planning, and replace them with a N5000-a-month transportation grant for the poorest Nigerians.

The minister said the payment will go to around 30 to 40 million Nigerians, who make up the country’s poorest population, at the introduction of the World Bank’s Nigeria Development Update (NDU) on Tuesday.

She stated that the final number of recipients will be determined by the resources available after the gasoline subsidy is removed.

“The [oil] sector’s subsidy structure is unsustainable and economically deceptive,” she said.

“We are working with our partners on ways to cushion the potential negative impact of the withdrawal of subsidies on the most disadvantaged in the bottom 40% of the population ahead of the projected date of mid-2022 for the complete abolition of fuel subsidies.

“One of these solutions would be to establish a monthly transportation subsidy in the form of a N5,000 cash transfer to between 30 and 40 million worthy Nigerians.”

According to the World Bank’s latest development report, Nigeria’s lowest 40% use less than 3% of the country’s total PMS, indicating that the wealthy profit more from the subsidies.

“We are very optimistic that recent developments in the oil sector, such as the Petroleum Industry Act (PIA) 2021, and, hopefully, the full reactivation of the country’s four public refineries, as well as the completion and start-up of the three private refineries under construction in 2022, will significantly boost the sector’s contribution to our economic growth efforts,” Ahmed said.

“I agree with the Report that, as a result of the growth of social protection policies during the pandemic, the government has the opportunity to phase off subsidies like the PMS while relying on cash transfers to ensure the welfare of low and middle-class households.”

According to Ahmed, the transfer is scheduled for June 2022, but the federal government hopes to complete it sooner than that, in accordance with the Petroleum Industry Act (PIA).

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