The Minister of Finance and Coordinating Minister of Economy, Taiwo Oyedele, has declared that the Presidency will not resume fuel subsidies, despite popular concern about the impact on the cost of living.
The Minister made the statement on Tuesday in Paris, France, where he and President Bola Tinubu were meeting with global investors.
Oyedele stated that subsidies caused economic “distortions” and that petrol prices will not be controlled since the Presidency felt the market could regulate itself.
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Following the termination of the petrol subsidy in May 2023, Nigeria’s inflation rate skyrocketed to a 19-year high.
Headline inflation increased from 22.41% in May 2023 to 34.19% in June 2024, led by dramatically higher gasoline, food, and transportation expenses, exacerbating the cost-of-living issue.
Following the June 2023 declaration, the inflation rate grew steadily, with food inflation reaching 39% by October 2024.
The elimination, paired with currency devaluation, increased transportation expenses by approximately 300%, exacerbating poverty.
“We will not bring back fuel subsidy because it creates distortions for the economy, and we won’t introduce price control because we believe in the market… the situation in Iran presents new opportunities for us as the world looks to diversify sources of energy and invest in new markets” , the Minister stated.
President Tinubu recently reminded investors that Nigeria’s foreign exchange has stabilized since the removal of the “burden” of gasoline subsidies, according to a statement issued by his Special Assistant on Social Media, Dada Olusegun.
“The subsidy, which was a burden on the entire country, was removed, and we have since achieved foreign exchange stability,” Tinubu told investors.
In a following statement, his Adviser on Information and Strategy, Bayo Onanuga, emphasized that his administration’s economic reform programme includes measures to reduce economic inefficiencies and stabilize macroeconomic indicators, setting the groundwork for long-term inclusive growth.
He also emphasized transparency and economic restraint, explaining why significant reforms should be implemented quickly.
Oyedele emphasized Nigeria’s robust GDP growth in dollar terms by 2025.
He stated that Nigeria experienced 11.2% GDP growth in dollar terms last year, reinforcing the country’s objective to reach a $1 trillion economy by 2030.
Oyedele emphasized the government’s near-term priorities of transforming reforms into tangible benefits for Nigerian citizens.
The Minister also promised to publish quarterly financial figures.
Patience Oniha, Director General of the Debt Management Office, told investors that the government is taking a responsible approach to debt financing and is focusing on sustainable debt management.
The investors included Citibank and Amundi France, which was directed by Valerie Baudson. BlueCrest, Ninety One (headquartered in Britain and South Africa), Kirkoswald Capital, Principal Finisterre, Prudential Global Investment Management (PGIM), and Mesarete Capital were also present.
President Tinubu, who departed Nigeria on Sunday on a three-nation trip, stated that his administration’s economic reform program includes efforts to eliminate economic distortions and stabilize macroeconomic indicators, laying the groundwork for long-term inclusive prosperity.
He stated that his government is committed to advancing reforms, increasing transparency throughout the oil value chain, and adopting a multifaceted security policy, which includes police decentralisation and disrupting terrorist financing.
“The focus remains on policy stability and diligent execution to ensure these strategic shifts translate into concrete benefits for all Nigerians” , Tinubu added.
Some investors who spoke at the gathering praised the government’s transformative changes and voiced optimism about Nigeria’s economy.
One of the investors inquired about President Tinubu’s post-2027 agenda.
He promised to improve fiscal discipline, transparency, and policy consistency.