Nigeria’s Finance Minister, Wale Edun, has reaffirmed the government’s position that fuel and foreign exchange (FX) subsidies are permanently removed.
Speaking during the World Bank’s Nigeria Development Update presentation in Abuja, Edun emphasized that these subsidy policies had imposed a severe financial burden on the nation.
“Fuel and FX subsidies are gone for good,” Edun declared, highlighting that the twin policies had drained the economy, costing Nigeria over N10 trillion—equivalent to five percent of the country’s Gross Domestic Product (GDP).
In response to the economic challenges, Edun announced a new government initiative focused on addressing unemployment through housing finance.
He explained that the strategy aims to boost construction activities, which, in turn, would create jobs.
“The plan will be centered on mortgage and housing financing,” he said.
Meanwhile, Central Bank Governor Olayemi Cardoso defended the recent half-percent interest rate increase, which brought the rate to 26.75 percent.
He stated that the bank’s decisions were grounded in data and intended to stabilize the Naira and control inflation.
“Policies and interventions will be data-driven moving forward,” Cardoso remarked.
However, not all leaders are in agreement.
Bauchi State Governor criticized the Federal Government’s policies during the event, arguing that they were exacerbating the hardships faced by Nigerians.
“These policies are not working,” he asserted.
This comes in the wake of the government’s decision in June 2023 to eliminate fuel and FX subsidies. Since then, fuel prices have surged from N195 per liter to N1030, while the FX exchange rate has skyrocketed from N461 per dollar to N1660.49. Additionally, Nigeria’s inflation rate has risen sharply to 32.70 percent as of September, compared to 20.41 percent in May 2023.
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