Nigeria secured $800 million from the World Bank for cash handouts to the poor as part of efforts to end a costly fuel subsidy by June.
The first tranche of funding from the Washington-based lender “will enable us to give cash transfers to the most vulnerable in our society that have now been registered in a national social register,” Finance Minister Zainab Ahmed said on Wednesday at a briefing in the capital, Abuja.
President-elect Bola Tinubu who will take over from Muhammadu Buhari on May 29, has pledged to end the subsidies that are expected by the Finance Ministry to drain $7.2 billion from state finances in the first six months of this year.
Removing the price cap that’s used by residents and small businesses in Africa’s most populous nation to run cars and power generators in the energy-deficient country is going to be politically difficult. Buhari resisted pressure from the World Bank and International Monetary Fund to end the payments that dwarf spending on education and health combined.
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The World Bank funds will be distributed to as many as 50 million people and the country is hoping to raise more resources to extend its support beyond cash transfers, Ahmed said.
“There are several things that we’re still planning and working on, some we can start executing quickly.”
