The Federal Government has said that it has succeeded in quietly removing subsidy on electricity tariff.
This was disclosed by Minister of Finance, Budget and National Planning, Zainab Ahmed, at a meeting of African Finance Ministers and the International Monetary Fund.
Ahmed said while petrol subsidy is the next target, it has been hindered by COVID-19 and forthcoming elections.
She further revealed that petrol subsidy has remained a huge problem for the government, and the rise in global oil prices would worsen the issue.
The Minister said;
“WE ARE CLEANING UP OUR SUBSIDIES. WE HAD A SETBACK; WE WERE TO REMOVE FUEL SUBSIDY BY JULY THIS YEAR BUT THERE WAS A LOT OF PUSHBACK FROM THE POLITY. WE HAVE ELECTIONS COMING AND BECAUSE OF THE HARDSHIP THAT COMPANIES AND CITIZENS WENT THROUGH DURING THE COVID-19 PANDEMIC, WE JUST FELT THAT THE TIME WAS NOT RIGHT, SO WE PULLED BACK ON THAT.
“BUT WE HAVE BEEN ABLE TO QUIETLY IMPLEMENT SUBSIDY REMOVAL IN THE ELECTRICITY SECTOR AND AS WE SPEAK, WE DON’T HAVE SUBSIDIES IN THE ELECTRICITY SECTOR. WE DID THAT INCREMENTALLY OVER TIME BY CAREFULLY ADJUSTING THE PRICES AT SOME LEVELS WHILE HOLDING THE LOWER LEVELS DOWN.
“THE CURRENT REVIEW THAT WE ARE DOING IS TO HOLD THE SUBSIDY AT THE LEVEL IN WHICH IT IS PLANNED… WE ARE CURRENTLY DOING A BUDGET AMENDMENT TO ACCOMMODATE INCREMENTAL SUBSIDY (REMOVAL) AS A RESULT OF THE REVERSAL OF THE DECISION AND WE WANT TO CAP IT AT THAT.
“HOPEFULLY, THE PARLIAMENT WILL AGREE WITH US AND WE ARE ABLE TO CONTINUE WITH OUR PLAN FOR SUBSIDY (REMOVAL) OTHERWISE THE WAY THINGS ARE GOING WE WILL NOT BE ABLE TO PREDICT WHERE THE DEFICIT WILL BE AS A RESULT OF THE FLUCTUATION IN THE GLOBAL MARKET.”
