Nigeria Facing EXISTENTIAL Threat, World Bank Warns
Category: Nigeria News
In light of Nigeria’s dwindling revenue, the continued payment of trillions of
naira on fuel subsidy by the government and the attendant economic challenges,
the World Bank on Wednesday raised the alarm that the country might be facing an
existential threat.
The international financial institution warned
that if the country failed to optimize its tax system and focus on other areas
to boost its revenue, the already low revenue would continue to drop. It noted
that despite the rise in the price of oil in the international market, Nigeria
had not reaped the benefits because of the huge amount spent on fuel subsidy.
The
Senior Public Sector Specialist, Domestic Resource Mobilization, at the World
Bank, Mr Rajul Awasthi, said these at a virtual pre-summit, with the theme
‘Critical Tax Reforms for Shared Prosperity’, organized by the Nigerian Economic
Summit Group on Wednesday. He insisted Nigeria would have to eliminate the
subsidy regime eventually.
READ: Nigeria's Recession Could Last Up To 2023 - World Bank
After the Federal Government earmarked about N4tn for subsidy payment in 2022, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, said recently that government might spend a whopping N6.72tn as fuel subsidy in 2023 or pay N3.36tn up to mid-2023 if the subsidy regime was to end in May 2023.
Also, the minister had consistently said the nation was battling with revenue problems, which had compelled the government to keep borrowing. The debt stock had risen to N41.6tn in the first quarter of 2022 with projections that it could peak at N45tn by the end of the year. Nigeria is rated the fifth on the list of the World Bank’s debtors, with $11.7bn debt stock as of June 30, 2021.
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