Eliminating fuel subsidies is a remedy for Nigeria’s N44 trillion debt load

Fuel subsidies should be eliminated, according to Mr. Idakolo Gbolade, CEO of SD & D Capital Management, to help ease Nigeria’s N44.25 trillion debt load.

The Federal Government revealed last week that it had received an $800 million loan from the World Bank that would be used as a band-aid after the termination of gasoline subsidies in June 2023.

In response to the news, Idakolo stated in an interview with Obasanjonews24 on Monday that the elimination of gasoline subsidies is not negotiable at this point in the Nigerian economy.

He emphasised that by eliminating subsidies, money will be made available to lower the federal government’s debt.

Nonetheless, he was concerned that the elimination of gasoline subsidies will exacerbate Nigerians’ already severe suffering if the aforementioned $800 million credit from the World Bank is not effectively directed.

If used effectively, the $800 million from the World Bank can lessen the discomfort of subsidy elimination.

But, he said, “Funds realised through subsidy reduction might assist the government in reducing its debt limits for funding the 2023 budget.” “It is highlighted that this could raise the debt load,” he said.

Financial analysts estimate that eliminating gasoline subsidies will save Nigeria seven trillion naira, given that the country’s overall debt load as of December 2022 is N44.25 trillion, according to the Debt Management Office.