Experts oppose IMF's push for complete removal of electricity subsidy

They said this in separate interviews with the News Agency of Nigeria (NAN) on Tuesday in Lagos. The former President of the Chartered Institute of Taxation of Nigeria, Dr McAntony Dike, advised the Federal Government not to heed the call of the IMF.

“Although the Bretton Woods institution might have adequate data to support their argument, it should not be implemented.

“This is due to the adverse impact it will have on the average Nigerian whose disposable income has been eroded,” Dike said.

He urged the IMF to partner more with the Federal Government on ways to provide loans to revamp the electricity industry for economic growth and development. This, he said, would revamp the economy rather than suggest removal of electricity subsidy without any form of improved utility or service.

Dike noted that the government should be more concerned on the ways to improve the provision of pre-paid meters to electricity consumers in the country instead of subsidy removal. Also speaking, the former President of the Chartered Institute of Bankers Association of Nigeria, Okechukwu Unegbu, described the IMF’s suggestion as unnecessary.

“The IMF proposal to the government to stop electricity subsidy is not the solution to our developmental challenges, especially now that the people are contending with a serious economic downturn,” Unegbu stated.

He noted that the IMF’s economic policies had not been the best for the country over the years.

“Their economic advisories are not suitable for emerging economies such as ours because of our own peculiarities.

“Most of their policies often times are considered anti-people and they tend to impoverish the majority of our people which is our best assets,” Unegbu added.

Also, the President Standard Shareholders Association of Nigeria, Godwin Anono, said the government should not implement the IMF suggestion because of the state of the economy.

“The people have been grappling with too many headwinds in the economy which have led to increase in the cost of living crisis in the country.

“Implementing this proposed policy will worsen our economic woes.

“The various international lenders should allow our country to develop at its own pace because we are still an emerging economy with some structural challenges,” Anono said.

NAN reports that the IMF has urged the Federal Government to completely phase out electricity subsidy in the country as a result of the hardship Nigerians are facing since the removal of fuel subsidy in May 2023.

The Bretton Woods institution made this recommendation as the mechanism for Nigeria to restore macroeconomic stability, coming as corroboration to what the government had said late last year that electricity subsidy between January and September 2023 had gulped ₦375.8 billion.

It noted that power consumers paid a total of ₦782.6 billion for the commodity during the same period. According to its published ‘Post Financing Assessment’ report, the IMF, added that the Federal Government had overwhelmed itself, thus recommending that the total removal of both fuel and electricity subsidies be implemented.

The IMF commended the Federal Government on the reforms it had implemented so far but reiterated that the fuel and electricity subsidies should be removed.

“The new administration has made a strong start, tackling deep-rooted structural issues in challenging circumstances,” it said.