World Bank has again expressed concerns over Nigeria government’s policies, warning that unless there are changes, things will remain unchanged.
The group listed the consequences warning that many Nigeria states won’t be able to pay salaries by the end of 2022.
The President of the World Bank Group, David Malpass at the ongoing World Bank/International Monetary Fund Spring Meetings in Washington DC stressed the need for
the Federal government to reconsider its policy on fuel subsidy, saying that the huge amount being expended on the policy could be channeled to other critical sectors.
Malpass pointed out that generalised subsidies have significant negatives effects on any system.
He says “One is that they are expensive because they go to everyone and they are often used by people with upper incomes than by people with lower incomes so they are not targeted.
“So, we encourage that when there is need for subsidy, either food or for fuel, that it should be carefully targeted at those most in need of it. And so, we have encouraged Nigeria to rethink its subsidy effort.”
The World Bank boss emphasized that the country must get rid of its multiple exchange rate system. Noting that “The multiple exchange rate is complicated and is not as effective as it would be if there were a single exchange rate.”
The group further reveals “The most useful thing for developing countries is to have a single exchange rate that is market-based, that is stable over long periods of time
as that attracts investment and so that would help.”
In addition, Nigeria has trade barriers that impede trade and capital flows, and the federal government should improve these conditions in order to help the economy.
and its people move forward.
Commenting on the spate of insecurity in the country, Malpass says “I take note of the complicated situation that they face where there are weapons flowing into northern Africa that find their way into to none Nigerians that create violence in Nigeria.
“This is a very challenging situation that the government faces. I think all over the world, people should have an understanding of the fragility that is facing several parts of the world, but in particular, the Sahel and the Sub-Saharan Africa area where the weapons flow from outside of Africa are putting a great burden on governments around the continent”.
