The International Monetary Fund (IMF) has issued a stark warning to Nigeria, urging the government to address its costly and inefficient subsidy regime or risk severe economic consequences.

In a statement released yesterday, the IMF cautioned that maintaining pump prices and tariffs below cost-recovery could lead to implicit subsidy costs ballooning to 3% of GDP in 2024, up from 1% in 2023.

Notably, President Bola Tinubu’s administration took a significant step by removing fuel subsidies during his inauguration on may 29, 2023.

According to the organization, this would put a significant strain on the country’s finances and undermine efforts to address poverty and inequality.

The IMF also noted that the current subsidy regime disproportionately benefits higher-income groups, rather than the vulnerable populations it is intended to support.

The organization urged the government to remove costly and untargeted fuel and electricity subsidies as inflation subsides and support for the vulnerable is scaled up.

Instead, the IMF recommended retaining a lifeline tariff to protect the poor and vulnerable from the impact of subsidy removal to help ensure that support reaches those who need it most, while also promoting economic efficiency and fiscal sustainability.

The IMF’s warning comes as Nigeria grapples with rising inflation and a struggling economy. The government has faced intense pressure to address the subsidy regime, with many arguing that it is unsustainable and ineffective.

The IMF’s projections suggest that implicit fuel subsidies could reach a staggering N8.4 trillion in 2024, up from N1.85 trillion in 2023, N4.4 trillion in 2022, N1.86 trillion in 2021, and N89 billion in 2020.

The electricity subsidy being paid to customers under Band B, C, D, and E was projected to stand at N540bn by the end of 2024.

According to reports, the Nigerian National Petroleum Company and the Minister of State for Petroleum (Gas), Heineken Lokpobiri, have repeatedly debunked claims that the Federal Government was paying fuel subsidies through the back door.

Meanwhile, the IMF’s call for the removal of electricity subsidy is coming amid protests from Nigerians who are calling on the Minister of Power, Adebayo Adelabu, to return the Band A tariff to the status quo.

Additionally, The organised labour has threatened to stage a protest on Monday if Adelabu fails to heed their calls.

In a worrying incident, a XEJET Airlines aircraft carrying 52 passengers veered off the runway at the Murtala Muhammed Airport in Lagos on Saturday, just 16 days after Dana Air was shut down by the Nigerian Civil Aviation Authorities.

The Airbus, with registration number 5N-BZZ, departed from Abuja and landed in Lagos at 11:29 am.

However, it skidded off the runway of the domestic wing of the airport, prompting the Federal Airports Authority of Nigeria to shut down the 18/Left runway.

The Nigerian Safety Investigation Bureau (NSIB) confirmed the incident and is investigating the cause of the skid.

No injuries or fatalities were reported, and an investigation is ongoing.

Details later…….. 

Senator David Umahi, the Minister of Works, has announced his firm commitment to face the House of Representatives’ scrutiny regarding the contentious N15 trillion Lagos-Calabar Coastal Highway road project.

Umahi also revealed plans to broadcast the proceedings live on television, ensuring transparency and accessibility for all Nigerians.

Emphasizing the project’s integrity, Umahi affirmed that he and the Ministry of Works meticulously adhered to proper procedures, securing all requisite approvals and documentation prior to project initiation.

He said, “I am ready to face the National Assembly to defend the project. I will not want to say anything now till I meet with the Senators and House of Reps members. It will be live so you will also hear it. It will be live so that Nigerians will see it.

“When people say the project is on personal interest, there is a contradiction there. This is because Atiku Abubakar said the Jonathan administration wanted to do that project which would have cost about $12bn or so. So, whose interest was that administration promoting in trying to do that project?

“I have a design from the NDDC (Niger Delta Development Commission) on that project. The NDDC designs are quite bulky. When I was implementing this current project, I had to call for the design.

“There is no personal interest in this project. The idea of that project came from the ingenuity of Mr President (Bola Tinubu) when he was governor; he was the one who procured the right of way within the Lagos corridor and gazetted it.

“The reason for the project taking off now is all about how we can inject some activities into the economy. If we want to come out of inflation, we have to look at investments in infrastructure and that is what this project is addressing. It is addressing a lot of elements of return on investments. There is no personal interest associated with that.

“It is quite petty to ask why it is starting from Lagos and not Calabar. The name of the project is ‘Lagos-Calabar Coastal Road’ and not the other way around. This means there is a zero point, which happens to be at Ahmadu Bello Way, which coincides with the Eko Atlantic.”

On status of the project he opined “That is pure coincidence. We have started the project already and it is progressing. As of today, I can tell you that about 80 per cent of the first 1.3km is completed.”