The removal of petrol subsidies and the adoption of market-driven foreign exchange policies have saved Nigeria an estimated $20 billion, according to Wale Edun, Minister of Finance and Coordinating Minister of the Economy.
The announcement, made during an event in Abuja marking the first 100 days of Esther Walso-Jack as Head of the Civil Service of the Federation, signals a major shift in the nation’s economic strategy.
Edun highlighted that the subsidy reforms, which previously consumed 5% of Nigeria’s GDP, have freed up significant funds for critical investments.
“Assuming GDP was $400 billion, five percent of that is $20 billion—resources that are now being redirected to infrastructure, healthcare, social services, and education,” he explained.
The decision to abolish the petrol subsidy, which was officially enacted on May 29 by President Bola Tinubu, has long been a topic of contention.
While the move has drawn criticism for causing short-term inflation and fuel price hikes, Edun argued that it addresses systemic inefficiencies and corruption.
“No one can wake up and target cheap funding or forex from the central bank to enrich themselves without adding value,” Edun emphasized. “Similarly, profiteering from the inefficient petrol subsidy regime is no longer possible.”
However, the transition has not been without hurdles.
In August, the Nigerian National Petroleum Company (NNPC) Limited revealed that the federal government owed ₦7.8 trillion for under-recovery costs, raising questions about the consistency of subsidy policy implementation.
Economists have pointed to the need for transparency in utilizing the savings to ensure that the promised investments in infrastructure and social services materialize. Citizens have also expressed concerns about the impact of subsidy removal on household expenses, especially in light of fluctuating global oil prices.
Edun’s announcement underscores a broader vision for Nigeria’s economy—one less dependent on unsustainable subsidies and more focused on strategic investments.
Experts believe that if properly managed, the $20 billion savings could drive transformative changes across key sectors, enhancing economic growth and reducing poverty levels.
While the debate on subsidy removal continues, the redirection of funds represents an opportunity for Nigeria to achieve long-term financial stability and inclusive development.
The government’s challenge now lies in ensuring that the savings genuinely benefit the citizens and address the nation’s critical developmental needs.