The International Monetary Fund, IMF, has praised President Bola Tinubu for embarking on reforms ex-Presidents Muhammadu Buhari, Goodluck Jonathan and Olusegun Obasanjo “shied away from.”
According to the IMF, “The new administration has made a strong start, tackling deep-rooted structural issues in challenging circumstances. Immediately, it adopted two policy reforms that its predecessors had shied away from: fuel subsidy removal and the unification of the official exchange rates.”
But the global financial institution admitted that “Per capita growth in Nigeria has stalled, poverty and food insecurity are high, exacerbating the cost-of-living crisis” as a result of the policies and provided a way out: electricity subsidy should go.
The Bretton Woods Institution said the total scrapping of the subsidy on the power sector would restore macroeconomic stability in the country by freeing up resources to mitigate the economic hardship occasioned by the fuel subsidy removal.
The IMF’s recommendation is coming on the heels of protests across Nigeria over the ballooning inflation that has remained unchecked by the present administration. It is feared that removing the electricity subsidy would aggravate the sufferings of Nigerians.
The Minister of Power, Adebayo Adelabu, said last year that the electricity subsidy was needed to alleviate “additional burden on Nigerians.”
“We just had the removal of fuel subsidy, we are talking about exchange rate skyrocketing, galloping inflation and so many others that bring hardship to the people,” Adelabu said at a press briefing in November 2023 in an argument for power subsidy.
