Nigeria’s Reinstated Fuel Subsidy Set to Drain Almost Half of Oil Revenue in 2024, IMF Says
- Subsidies were reintroduced due to high inflation, naira slump
- President Tinubu briefly scrapped subsidy mid-last year
An attendant handles a fuel pump at a gas station in Lagos, Nigeria.
Photographer: Benson Ibeabuchi/BloombergThis article is for subscribers only.
Nigeria’s reintroduction of a gasoline subsidy months after it was scrapped is expected to guzzle almost half of its projected oil revenue this year, according to the International Monetary Fund.
The implicit subsidy will cost Africa’s largest crude producer an estimated 8.43 trillion naira ($5.9 billion) of its projected 17.7 trillion naira of oil revenue, the IMF said in a report published on Thursday. Its forecasts are similar to Bank of America’s, which projects it could cost Nigeria between $7 billion and $10 billion this year if it imports between 18 and 25 billion liters of gasoline, Tatonga Rusike, BofA sub-Saharan Africa economist, wrote in a note.