The Minister of Finance and Coordinating Minister of the Economy, Wale Edun has declared that the removal of the fuel subsidy and the transition to a market-oriented foreign exchange pricing in the country has saved the economy $20 billion.
The Minister disclosed this at an occasion in Abuja held to commemorate the First 100 days in the office of Esther Walso-Jack as Head of the Civil Service of the Federation
“The petrol subsidy and foreign exchange subsidy together accounted for five percent of GDP,” Edun explained.
“Assuming a GDP of $400 billion, that amounts to $20 billion. These funds are now being redirected to critical sectors such as infrastructure, health, education, and social services.”
On May 29, President Bola Tinubu removed the petrol subsidy to reduce the corrupt practices and wrongdoing inherent in the subsidisation system.
Explaining the broader impact of the decision, Edun said “No one can now manipulate cheap funding or foreign exchange from the central bank without adding value. Similarly, profiteering from the inefficient petrol subsidy regime is no longer an option.”
With the decision of the government concerning the issues, things should be better.
On August 19th, the Nigerian National Petroleum Company (NNPC) Limited announced that the federal government has outstanding debts in the amount of ₦7.8 trillion, calling into question the issue of transparency. Such statements further raised the question of whether indeed the government has guaranteed that the subsidy did not come back.
The removal of the petrol subsidy has faced mixed reactions across Nigeria as some praise the long-term financial benefits, while others struggle with the immediate effects of rising fuel costs.
“We understand the government’s position, but the cost of living has become unbearable. There needs to be a balance”, an X (formerly Twitter) user.
As the government continues to defend its stance, Nigerians remain divided over the sustainability and equity of the policy.
