Wale Edun, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, has disclosed that the country has saved $20 billion through the removal of petrol subsidy and the introduction of market-based foreign exchange pricing.
Edun made the announcement in Abuja during an event marking the first 100 days in office of Esther Walso-Jack, Head of Civil Service of the Federation.
He highlighted the significant economic burden these subsidies placed on the nation prior to their removal.
“An amount of five percent of GDP is what those two subsidies were costing when there was a subsidy on PMS [Premium Motor Spirit] and when there was a subsidy of foreign exchange,” Edun said.
He estimated Nigeria’s GDP at an average of $400 billion, explaining that five percent of this equates to $20 billion.
“These funds could have been invested in critical sectors like infrastructure, health, social services, and education,” he noted, emphasizing the reallocation of these resources to essential development areas.
Edun criticized past practices where individuals exploited government policies for personal gain, particularly in the subsidy and foreign exchange markets.
“The real change that has happened with the measures of Mr. President is that nobody can wake up and their target for the day or year is to get access to cheap funding from the central bank, flip it, and become wealthy without adding value. Similarly, they can no longer profit from the inefficient petrol subsidy regime,” he stated.
The removal of the petrol subsidy was one of President Bola Tinubu’s key announcements during his inaugural address on May 29. However, the policy has faced challenges.
In August, the Nigerian National Petroleum Company Limited revealed that the federal government owed it N7.8 trillion for under-recovery, sparking debates about a possible reintroduction of a “temporary subsidy” due to soaring crude oil prices and foreign exchange rates.
Despite these challenges, Edun’s remarks underline the government’s commitment to redirecting resources toward sustainable development, marking a shift from subsidy-dependent policies.
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