June 2, 2023

Fuel subsidy removal antidote to Nigeria’s N44trn debt burden

Fuel subsidy removal antidote to Nigeria’s N44trn debt burden

The CEO of SD & D Capital Management, Mr Idakolo Gbolade, said fuel subsidy removal would help reduce Nigeria’s N44.25 trillion burden.

The Federal Government last week hinted that it had secured $800 million loan from the World Bank to be used as palliatives for post-fuel subsidy removal in June 2023.

Idakolo, reacting to the development in an interview with DAILY POST on Monday, said fuel subsidy removal is non-negotiable at this time in Nigeria’s economy.

He explained that the funds that would be realised from subsidy removal would reduce the federal government’s debt burden.

He, however, worried that if the said $800 million loan from the World Bank is not properly channelled, fuel subsidy removal would cause more pain to already stressed Nigerians.

“The $800 million from the World Bank, if properly utilized, can reduce the pains of subsidy removal.

“It is noted that this could increase the debt burden, but on the flip side, funds realised from subsidy removal could help the government reduce its debt outlines for financing the 2023 budget,” he stated.

According to financial experts, fuel subsidy removal would save Nigeria seven trillion naira, as the Debt Management Office said the country’s total debt stock as of December 2022 is N44.25 trillion.

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