According to the World Bank, subsidies benefit only wealthy households and reduce government spending on poor Nigerians. It went on to say that the subsidies were far greater than what was spent on education, health, and social protection in 2021.
“For years, a large share of Nigeria’s resources has financed inefficient and regressive subsidies for petrol, electricity, and foreign exchange,” the statement said. It went on to say that Nigeria had one of the world’s lowest levels of public expenditure and revenue, undermining the government’s ability to improve service delivery.
These would lay the groundwork for the necessary increases in government revenue and spending to improve development outcomes.
The World Bank is prepared to provide additional assistance to Nigeria as it designs and implements these critical reforms.