Why Nigeria’s fuel subsidy does not favour the poor — World Bank

Vice President for Sustainable Development, World Bank, Laura Tuck, has warned Nigeria and other countries paying subsidies on fossil fuels to desist from it as such practice was not in favour of the poor, TOPNAIJA.NG reports.

Tuck made this known at the ongoing World Circular Economic Forum in Helsinki, Finland while addressing the theme ‘Scale it up! The Next Era of the Circular Economy.’

According to her, the continuous payment of huge sums of money as subsidies on fossil fuels has worsened resources consumption and increased greenhouse emission and pollution.

“Strong evidence shows that a lot of countries put subsidy on fossil fuels, and these subsidies are insufficient to support the poor. They aggravate resources consumption, pollution and greenhouse gas. Globally, subsidies on fossil fuels are huge,” she added.

Tuck said, “We cannot achieve a circular economy if we continue to make policies that give incentives to overuse of resources. Circularity means we use fewer non-renewable energy like fossil fuels and carefully manage our renewable resources like Timber and fisheries, among others.”

Highlighting some of the impacts of subsidising petroleum, she said plastic products produced from fossil fuels had become cheaper, making it unprofitable to recycle plastic waste.

The President, Sitra, Mikko Kosonen, in his welcome address, called for both public and private investment in transitioning the world economy to a circular economy.

“We have 10 years to switch to a circular economy to prevent ecological catastrophe,” he warned.

The Head, Climate Change and Green Growth at the African Development Bank, Anthony Nyong, noted that African leaders were aware of the negative impact of continuous use of non-renewable energy but the willpower to make was non-existent.

Speaking at the Circular Economy for Africa Session, he said, “We spend 22 times more on subsidy than what we spend on the energy itself. That does not allow investors to come in because we have over-subsidised this initiative that other people cannot invest in it.

He advised African governments to change the narrative, see climate change as doom and gloom and identify the opportunities that could be taken advantage of in the circular economy.

“At the AfDB, we have said over the next five years, we are putting $25bn as our own investment towards that and it is sufficient to leverage other country’s resources to make sure we are on the right track in terms of the circular economy,” he added.

The Managing Director and Chief Executive Officer, Finnfund, Jakko Kangasniemi, noted that the development financing company had started working with African governments to develop commercial forestry to preserve biodiversity in Rwanda and renewable energy in Kenya.

“These opportunities are environmental and commercial opportunities where we can make profitable investments. There are huge opportunities in the circular economy in Africa. The future is bright and we can work together,” he added.