Why we’re borrowing more to fund petrol subsidy – Zainab Ahmed

Zainab Ahmed, Nigeria’s Minister of Finance, has explained how the federal government will be funding petrol subsidy.

In a chat with Reuters on the sidelines of an Arab-African conference in Cairo, the Minister said the federal government will use $2.2 billion of the fund raised via eurobond to cater for petrol under-recovery costs.

Ahmed also said the FG would target more local borrowing in 2022 to fund subsidy payments, but won’t ap the eurobond market this year.

According to her, “Rising oil prices have put us in a very precarious position … because we import refined products … and it means that our subsidy cost is increasing”

Ahmed also said the federal government is working with lawmakers to boost revenues. She added that the rise in oil prices means that borrowings will increase more than planned.

Ahmed has served the Nigerian public in various high ranking positions, including as managing director of the Kaduna State of Nigeria’s investment company, and also the Chief Finance Officer of the Nigeria mobile telecommunications company. Zainab was reappointed and sworn in as the Minister of Finance on 21 August 2019 by the President.