Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has announced that the country has saved $20 billion by eliminating the petrol subsidy and implementing market-based foreign exchange pricing.
Edun made this revelation during an event in Abuja celebrating the first 100 days in office of Esther Walso-Jack, the Head of the Civil Service of the Federation.
“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 emphasised that these funds are now being redirected to support developmental initiatives. “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,” Edun said. “Similarly, profiteering from the inefficient petrol subsidy regime is no longer possible.”
The end of the petrol subsidy regime was announced by President Bola Tinubu on May 29. However, by August 19, the Nigerian National Petroleum Company (NNPC) Limited disclosed that the federal government owed ₦7.8 trillion for under-recovery, despite earlier denials of any subsidy reintroduction.
