Nigerian Government rejects IMF advice as fuel queues surfaces, says no plan to remove fuel subsidy immediately

Minister of Finance, Zainab Ahmed

The Federal Government of Nigeria has stated that it has no plan to remove fuel subsidy soon.

Zainab Ahmed, the Minister of Finance, on Sunday revealed this while responding to the advice of the International Monetary Fund (IMF) to the Nigerian Government to remove fuel subsidy.

Following IMF’s advice to Nigeria, fuel queues have appeared in many parts of the nation including Ondo, Osun and even the Federal Capital Territory.

The fuel queue is apparently caused by the rumours of possible subsidy removal.

“There is no imminent plan to remove subsidy,” Finance Minister Zainab said at a briefing on the outcome of their meeting with investors and institutions at the IMF/World Bank meetings in Washington DC, United States.

“IMF said that fuel subsidy is better removed so that we can use the resources for other important sectors.

“In principle, It’s a good suggestion. But in Nigeria, we don’t have any plans to remove fuel subsidy 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 an alternative if we have to remove it. We are not yet at the point of removing fuel subsidy yet,” she noted.

She however noted that the meeting in Washington DC was a success, adding that it provides Nigeria with the opportunity to review developments in global economy and consequently proffer appropriate solutions.

Zainab noted that Nigeria must priorities cost-effective policies that would increase resilience of shock, boost productivity and also raise the incomes of the bottom 40% of the Nigerian population.

“In my capacity as representative of 23 African countries, I addressed the IMFC and issued a statement calling for normalisation of trade relations among the contending parties and called for concerted efforts to supporting multilateralism and avoid protectionist sentiments.

“At the G-24 meeting, I drew the attention of the World Bank to some of the challenges we face in implementing our portfolio like the implementation of the new environmental and social safeguards framework which tends to slow down implementation of our infrastructure projects.

“My engagement at the IMFC also focused on the global policy agenda.

“Governors underscored the importance of strengthening market competition, encouraging innovation, tackling weak governance and corruption and meeting the SDGs.

“Governors underlined the importance of strengthening international coordination and cooperation to tackle shared challenges, given the potentially damaging effects of trade tensions on global economic developments, and impact of natural disasters on developing countries,” she said.

The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, who was also part of the delegation to DC met with Queen Maxima of the Netherlands who is the United Nations Secretary-General Special Advocate on Financial Inclusion.

“We reviewed the position of Nigeria in terms of financial inclusion, observing that the rate of inclusion is moving up aggressively and we are very optimistic that in 2020 we will meet the 80 per cent inclusion target.

“We also met with foreign investors who expressed confidence in what we are doing in Nigeria and this has been supported by the inflows that you may have observed recently between December and this time.

“A major take away from this meeting is that although the GDP numbers for Nigeria is low at 1.9 per cent in 2018, I’m encouraged by the IMF predictions that global growth will pick up by second half of 2019 and emerging market economies like India, Brazil, China and Nigeria will help to drive growth.

“This means that a lot of eyes are on Nigeria and we must work hard to aggressively push up our growth numbers. But I’m hopeful that this can be achieved,” he said.

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