Okonjo-Iweala calls for removal of fossil fuel subsidies globally

*Dr. Ngozi Okonjo Iweala.

*Dr. Ngozi Okonjo Iweala.

*Says 2012 botched subsidy removal was politically motivated

Oscarline Onwuemenyi,
with agency reports

11 December 2015, Sweetcrude, Abuja – The immediate past Minister of Finance and the current Commissioner, Global Commission on the Economy and Climate, Dr. Ngozi Okonjo-Iweala has urged nations across the globe to do away with subsidies on fossil fuels.

And, for the first time, the former minister admitted that the reason the plan to remove fuel subsidy in 2012 by the Goodluck Jonathan administration was due to poor timing on the part of the government.

Okonjo-Iweala, who stated this in an article published in the Financial Times, noted that governments’ support for fossil fuel subsidies would amount to almost $650bn this year globally and added that “the cost of these subsidies far outweighs the benefits and burdens the middle classes.”

According to her, the botched plan to remove of petrol subsidy in Nigeria in January 2012 was as a result of political pressure and that the policy of subsidy removal was planned to be introduced later than that time.

She noted, however, that protests which ensued meant that the reform had to be partially rolled back, adding that despite this, “we were right to act.”

She noted that even phasing out half of the subsidies was a substantial achievement, adding that some $13bn worth of petrol subsidies, including many fraudulent claims, had burdened the national budget. She stated that the government was able to redirect some of those funds into other social and infrastructure projects that were needed at the time.

She noted that, “Using lessons learnt from Nigeria and other countries, we can put together a set of best practices to follow. These include co-ordinated communication, implementation and redistribution efforts. Reform should also create a broad sense of political ownership, especially in fiscally decentralised countries.”

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