He noted the economic burden previously posed by the subsidies and highlighted the government’s focus on redirecting funds to critical sectors.
Nigeria has saved a lot of funds by eliminating the petrol subsidy and shifting to market-based foreign exchange pricing, according to Wale Edun, the Minister of Finance and Coordinating Minister of the Economy.
Edun made this known during an event in Abuja to commemorate the first 100 days in office of Esther Walso-Jack, Head of the Civil Service of the Federation.
He noted the economic burden previously posed by the subsidies and highlighted the government’s focus on redirecting funds to critical sectors.
“An amount of five percent of GDP is what those two subsidies were costing,” Edun explained.
“When there was a subsidy on PMS and on foreign exchange, they collectively cost five percent of GDP. Assuming GDP was $400 billion on average, five percent of that is $20 billion—funds that could now go into infrastructure, health, social services, and education.”
He explained that the redirected savings are now funding developmental projects, emphasizing, “The real change is that no one can wake up and exploit cheap funding or forex from the central bank for personal gain without contributing value. Likewise, profiteering from the inefficient petrol subsidy system is no longer feasible.”
President Bola Tinubu formally ended the petrol subsidy regime on May 29, 2023.
However, on August 19, the Nigerian National Petroleum Company (NNPC) Limited revealed that the federal government owed ₦7.8 trillion for under-recovery, contradicting earlier claims denying any reintroduction of subsidies.
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