- FG’s indebtedness to FERMA now about N1trillion
By Abiola Olawale
Renowned human rights lawyer and Senior Advocate of Nigeria (SAN), Femi Falana, has accused the World Bank and the International Monetary Fund (IMF) of allegedly strong-arming the federal government of Nigeria into scrapping the long-standing petrol subsidy.
This comes as discussions surrounding Nigeria’s fuel subsidy removal, announced by President Bola Tinubu in May 2023, have continued to dominate headlines.
Falana, a vocal critic of Tinubu’s administration, argued that the decision was far from a homegrown initiative, labeling it as an externally imposed condition tied to international loans and aid packages.
Falana, speaking with Channels Television pulled no punches in attributing the subsidy’s end to pressure from the Bretton Woods institutions.
“When the Nigerian Government said it was removing subsidies, as a matter of fact, if I must say this, it was the World Bank and the International Monetary Fund (IMF) that insisted that the government must remove all subsidies,” he stated.
The New Diplomat reports that Falana’s comment came after the IMF and World Bank had long advocated for subsidy elimination in Nigeria, viewing it as a drain on public finances.
In a 2022 report, the IMF urged the country to “remove untargeted fuel subsidies and channel resources to the poor,” warning that continued subsidies could widen the budget deficit despite rising global oil prices.
More recently, in early 2024, the IMF reiterated calls for phasing out petrol and electricity subsidies, estimating that maintaining them could cost Nigeria up to N2.33 trillion – equivalent to three percent of its GDP.
However, Falana highlighted that such prescriptions ignore the harsh realities on the ground, claiming that fuel prices have tripled post-removal.
He continued: “There’s no way you can remove subsidies completely; no country in the entire world has abolished subsidies completely.
“Even leading Western countries like the United States, the United Kingdom, France, and others subsidise electricity, agriculture, and many aspects of people’s lives.”
Speaking on the planned five percent fuel surcharge, Falana urged the government to avoid worsening economic hardship.
He said the government should first remit funds owed to the Federal Roads Maintenance Agency (FERMA), while insisting that Nigerians should not be asked to bear fresh taxes.
He stated: “The provision was clear: 40 percent for federal roads, 60 percent for state roads; sadly, the government never implemented it.
“We asked FERMA in 2011 how much was collected; they replied that the government never gave them a kobo.
“The money was deducted but not remitted; this new tax should first address those missing collections,” Falana added.
“By 2022, even the Senate confirmed that over one trillion naira was owed to FERMA.
“Before introducing new levies, the government must tell Nigerians what happened to the earlier deductions.”
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