In a significant development, the World Bank has thrown its support behind the Federal Government’s decision to remove subsidies and unify the exchange rate in Nigeria. Speaking at an event organized by the World Bank to assess the country’s economy, Dr. Subham Chadhuri, the Country Director, emphasized the importance of these measures for rebuilding the nation’s economy, despite acknowledging the short-term challenges they may present.
Dr. Chadhuri also called for the implementation of measures to mitigate the impact on the population. Notably, the World Bank has shown its commitment to Nigeria’s economic reforms by providing concessional funding of over ten billion dollars.
Additionally, lead economist Alex Seinart projected that the removal of fuel subsidies could result in fiscal gains of approximately 3.9 trillion Naira in 2023. Although Seinart cautioned that this move might temporarily increase inflation, he also predicted that it would contribute to disinflation in the medium term.
Furthermore, Seinart highlighted how the previous foreign exchange management approach hindered investment and economic growth, leading to inflation and undermining the effectiveness of monetary and fiscal policies.
This endorsement from the World Bank affirms the government’s efforts to implement crucial economic reforms and lays the groundwork for a more stable and prosperous future for Nigeria.
Edited by Damilola Adeleke
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