Federal Government still deliberating on fuel subsidy removal

The Federal Government has not taken any decision on whether to remove or leave fuel subsidy as it is, rather, it is on the front burners of debate by officials of the government, the Permanent Secretary, Federal Ministry of Finance, Mrs. Ana Daniel-Nwaobia, has said.

There are various considerations that will come into play before a decision would be reached. You have to take into consideration various issues before you remove subsidy. It’s a political issue, and you know we have a new government that is studying it, with time, we will know the position of government on that. We noted that in our discussions with other ministers of finance, that everybody is struggling, and everyone is coming up with solutions and strategies on how to weather the storm for now.

She said all this during the World Bank/International Monetary Fund (IMF) meeting in Peru adding that there’s a consensus that one way of addressing this, “is by mobilising domestic resources.”
She pointed out that reforming the tax system which the Federal Government has started, is the right thing to do, stating that the engagement of McKinsey, (a firm of tax consultants), working with the Federal Inland Revenue Service (FIRS), would contribute to shoring up tax revenues.
She said:

In our engagement with the World Bank also, we sought assistance, so that they will work with us to see how we can improve on what is already on the ground.

We are also looking at other areas of revenue, because our main concern is about how we can shore up our sources of revenue. We are going to engage also with the World Bank on how to give capacity and support to our Customs, because Customs is one of the key revenue earners in the country, so that we will be able to build their capacity and see how they can add to our revenue base.

Mrs. Daniel-Nwaobia, said the issues of environment and the effect of climate change were also discussed by the Nigerian delegation at the meetings, because in her words: “we suffer the effect of climate change in terms of drought and flooding” which are drastic on the economy.
She said the issue was thoroughly discussed in one of the meetings, as well as means of how resources could be mobilised to tackle the issues surrounding climate change preparatory to the summit on climate change that is scheduled for Paris, France, later in the year. She said the Nigerian team had meeting with other funding agencies, including the International Finance Corporation (IFC) on how to fund some projects in the country especially in the area of building infrastructure.
Mrs. Daniel-Nwaobia said government is already thinking of how to set up an Infrastructure Fund, and looking for how to fund it.

So we have discussed with the IFC and other agencies in the understanding that when we are able to identify some of these infrastructure projects, they will participate in the funding of some of these projects. It was thoroughly discussed in one of the meetings to the effect that we can mobilise resources to tackle the problem.