The World Bank has expressed its support for the Federal Government’s decision to remove subsidies and unify the country’s exchange rate.

This follows President Bola Tinubu’s recent speech advocating for these measures.

During an event organised by the World Bank to assess Nigeria’s economy over the past six months on Tuesday, Country Director, Dr. Subham Chadhuri, emphasised that although the policy would be painful, it is essential for rebuilding the nation’s economy.

He also called for measures to mitigate the impact on the population moving forward.

Chadhuri disclosed that the World Bank’s concessional funding to Nigeria currently amounts to over ten billion dollars, underscoring the organisation’s commitment to supporting the country’s economic reforms.

Also, a lead economist at the World Bank, Alex Seinart, projected that the removal of fuel subsidies would yield fiscal gains estimated at about 3.9 trillion Naira in 2023.

Seinart cautioned that the subsidy removal might lead to a temporary increase in inflation in the coming months but predicted it would contribute to disinflation in the medium term.

On the exchange rate, the senior economist highlighted that the previous foreign exchange management approach hindered investment and economic growth, contributed to inflation, and undermined the
effectiveness of monetary and fiscal policies.