World Bank okays Nigeria’s economic reforms, says fiscal deficit shrinking

The World Bank on Thursday passed a vote of confidence on the economic reforms by President Bola Tinubu’s administration saying they are beginning to show results.

Alex Sienart, the bank’s Chief Economist in Nigeria stated this during his presentation at the launch of the recent edition of Nigeria Development Update (NDU) titled, “Staying the course; Progress amid pressing Challenges” 

Sienaert said Nigeria’s fiscal deficit has reduced from 6.2 percent in the first half of last year to 4.4 percent in the first half of this year.

Hear him; “We are seeing a fiscal consolidation underway with the fiscal deficit shrinking from 6.2% of GDP in the first half of 2023 to 4.4% of GDP in H1, 2024 and that is largely due to expenditure being roughly constant.” 

READ ALSO: World Bank warns latest fuel price hike may worsen inflation in Nigeria

“So this surge in revenue is largely due to the removal of implicit subsidy which was even more larger than the PMS subsidy that we talk about. So if you look, in 2022 the PMS subsidy was around N5 trillion but if you look at the revenues the federal government should have been getting from anything dollar-related be it oil revenues and taxes, customs, etc that hit N6 trillion in 2022. So the combined cost was N10.7 trillion or 5% of GDP and that was what was driving the accumulation of Ways and Means.” 

By Babajide Okeowo

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