The Federal Government of Nigeria has officially declared the termination of fuel and foreign exchange subsidy policies.
Minister of Finance
During the presentation of the Nigeria Development Update by the World Bank in Abuja last Thursday, the Minister of Finance, Wale Edun emphasized that these subsidies have been eradicated, highlighting their detrimental impact on the nation’s economy.
Mr. Wale Edun said: ‘Fuel and FX subsidies are extinguished’ revealing that these policies had cost the country over N10 trillion—approximately five percent of Nigeria’s Gross Domestic Product (GDP). The financial strain imposed by these subsidies has been unsustainable, prompting the government to take decisive action.
In an effort to tackle unemployment, Edun announced a new initiative centered on housing finance. ‘The government expects this approach to boost construction activities and generate significant job creation’ emphasizing that the plan will focus on mortgage and housing financing to stimulate the economy.
Additionally, the Governor of Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso provided insights into the recent interest rate hike of 0.5%, which now stands at 26.75%. He stated that these measures, designed to combat the Naira crisis and rising inflation, are grounded in empirical data. ‘Policies and decisions will be based on evidence and data going forward’.
However, not all attendees welcomed the government’s approach. The Governor of Bauchi State voiced strong criticism of the federal policies, asserting that they have contributed to the hardships faced by Nigerians. ‘These policies are not working,’ he declared, reflecting the concerns of many citizens.