Nigeria’s Finance Minister, Wale Edun, has alluded to the possibility that the government has saved $20 billion by ending petrol subsidies and floating the Naira.
During a recent event marking Esther Walso-Jack’s 100 days in office as Head of Service of the Federation, Mr Edun appeared to suggest that he estimated the savings by subtracting the previous cost of subsidies on fuel and Naira to the federation, which he claimed was 5% of the GDP.
Edun explained, “When there was a subsidy on PMS and on foreign exchange, they collectively cost 5% of GDP. Assuming GDP was $400 billion on average, five percent of that is $20 billion.”
It is unclear where Mr Edun got his estimate of Nigeria’s GDP at $400 billion, as the current GDP estimate of Nigeria, according to Wikipedia is $252.73 billion.
However, Edun said the saved funds will now go to “funds that could now go into infrastructure, health, social services, and education.”
The Minister tacitly admitted that his figure of saving $20 billion might not hold up when he remarked, “The real change is that no one can wake up and target cheap funding or forex from the central bank to enrich themselves without adding value.”
He also noted that “profiteering from the inefficient petrol subsidy regime is no longer possible.”
Subsidies were supposedly ended during President Bola Tinubu’s infamous inaugural “Subsidy Has Gone” speech on May 29, 2023. Nonetheless, on August 19, the Nigerian National Petroleum Company (NNPC) Limited revealed that the federal government owed ₦7.8 trillion for under-recovery.
This contradicts previous claims denying any reintroduction of subsidies.
Comment, Like 👍, share this article, and Follow us on our social media handles.
WhatsApp Channel
Telegram Channel
