By Onu Okorie
The Minister of Finance, Taiwo Oyedele, has said savings from the removal of fuel subsidies and foreign-exchange market reforms have been largely absorbed by rising debt-servicing costs and increased government spending.
Oyedele, who stated this at the African Emerging Markets Forum in Abuja yesterday, further explained that the federal government has continued to defend reforms widely blamed for worsening living conditions across Nigeria.
”President Bola Tinubu’s 2023 reforms, which scrapped fuel subsidies and unified the foreign exchange market, won backing from investors and international lenders but drove up the cost of living for millions of Nigerians, intensifying scrutiny over how the resulting savings have been deployed.” He said.
Oyedele said fuel subsidies and what he described as an implicit foreign-exchange subsidy had cost Nigeria roughly 5% of GDP before their removal.
He said part of the savings had since been eaten up by higher debt-servicing costs, with borrowing rates climbing to as much as 24%, up from around 8% before the reforms.
The minister added that the government’s wage bill had nearly doubled after the national minimum wage was more than doubled to ₦70,000 ($51) a month. He said spending had also risen on an education loan programme that provides tuition support and monthly stipends to more than 1.5 million students.
Oyedele pushed back against a recent International Monetary Fund assessment suggesting that millions of Nigerians remained in poverty despite reforms welcomed by investors, arguing that a temporary decline in real incomes was an inevitable consequence of subsidy removal.
He said the government would instead track progress through measures including multidimensional poverty, real per-capita income growth, and income inequality, rather than relying on headline GDP growth alone as an indicator of success.