By Yemi Yusuf
President Bola Tinubu’s economic policies received a major boost, Tuesday, as the World Bank announced its support for the administration’s subsidy removal and exchange rate unification.
This comes weeks after President Bola Tinubu’s inaugural speech which formally removed subsidy and argued for the need to unify Nigeria’s exchange rate.
Speaking at an event organised by the World Bank to assess the nation’s economy in the last six months, the bank’s Country Director, Dr Subham Chadhuri, explained that the policies though painful were the key to rebuilding the nation’s economy.
Mr Chadhuri who advocated measures to reduce the impact of these policies on the people going forward said the World Bank’s concessionary funding to Nigeria now stands at over ten billion dollars.
Also speaking at the event, a lead economist at the World Bank, Alex Seinart, said the removal of fuel subsidy is projected to achieve estimated fiscal gains of about 3.9 trillion Naira in 2023.
He said the gains are expected to reach over 21 trillion naira between 2023 and 2025.
The economist further predicted that the petroleum subsidy removal would likely lead to an increase in inflation in the upcoming months before contributing to disinflation in the medium term.
On the exchange rate, the senior economist said that the previous foreign exchange management approach impeded investment and growth, contributed to inflation and undermined the efficacy of the monetary and fiscal policies.
