World Bank projects Nigeria’s subsidy savings to hit N11tr by 2025

The World Bank has projected that savings from subsidy removal in Nigeria would accrue to over N11 trillion by 2025.

The Bretton Wood institution made the projection in its latest Nigeria Development Update (NDU) titled: “Turning The Corner, From Reforms and Renewed Hope to Results,” launched on Wednesday in Abuja.

It projected that the removal of fuel subsidy which came into effect on June 1 would save the government N2 trillion, which is about 0.9 percent of the country’s total economic output this year.

The report read: “The removal of the subsidy was announced on May 29 and pump prices were adjusted on June 1. This results in expected fiscal savings of about N2 trillion in 2023 or 0.9 percent of GDP.

“Between 2023 and 2025, the expected gains are over N11 trillion against a scenario in which the subsidy had continued.”

READ ALSO: World Bank urges Nigerian govt to increase VAT rate to boost non-oil revenue

World Bank also revealed that Nigeria’s oil production has slightly improved by 4.6 percent year-on-year during the initial nine months of 2023.

However, the growth was still below the average monthly production of 1.7 million barrels per day (mbpd) before the COVID-19 pandemic.

Additionally, it fell short of Nigeria’s Organisation of Petroleum Exporting Countries (OPEC) quota of 1.7 mbpd and the 1.69 mbpd set by the Federal Government in the 2023 budget.

However, in 2024, Nigeria’s OPEC quota was pegged at 1.5 mbpd, and the 2024 budget benchmark of 1.7 mbpd.

In November, the country produced 1.4 mbpd, inclusive of condensates production, after recording over 1.5 mbpd in September and October.

By: Babajide Okeowo

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