The Managing Director, International Monetary Fund (IMF), Mrs. Christine Lagarde, has on Thursday advised the Federal Government to end spending on fuel subsidy and instead expend such money on education, health and infrastructural development.
She made the call during the Global Policy Agenda press briefing at the ongoing World Bank Spring Meeting in Washington DC.
Lagarde stated that subsidy spending is affecting other critical areas of capital development. Hence, the need for the government to review the policy.
She said: “As far as Nigeria is concerned, with the low revenue mobilisation that exists in the country; in terms of tax to GDP, Nigeria is amongst the lowest. A real effort has to be done in order to maintain a good public finance situation for the country, and in order to direct investment towards health, education, and infrastructural development.”
Lagarde further laments: “If you look at our numbers from 2015, it is no less than about 5.2 trillion dollars that are spent on fuel subsidies and the consequences thereof. And the Fiscal Affairs Department has actually identified how much would have been saved fiscally but also in terms of human life if there had been the right price on carbon emission as of 2015. Numbers are quite staggering.
“If that was to happen, then there would be more public spending available to build hospitals, to build roads, to build schools, and to support education and health for the people.
“Now, how this is done is the more complicated path because there has to be a social protection safety net that is in place so that the most exposed in the population do not take the brunt of those removal of subsidies principle. So that is our position.”