Wale Edun, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, has warned of significant economic challenges if future administrations attempt to reverse the removal of fuel and foreign exchange (forex) subsidies.
Edun highlighted the progress made under President Bola Tinubu’s government, noting that the removal of these subsidies has helped reduce the portion of Nigeria’s revenue allocated to debt servicing from 98% to 61%. This adjustment has allowed the government to better manage its financial obligations and infrastructure projects.
In his statement, posted by Temitope Ajayi, the Senior Special Assistant to the President on Media and Publicity, Edun emphasized that reversing the subsidies would undo these financial gains. He cautioned that any administration aiming to reintroduce subsidies would face substantial difficulties, including the need to borrow extensively to cover government responsibilities, such as salaries and infrastructure development.
Edun warned that such a reversal could lead to increased debt levels and potentially jeopardize Nigeria’s economic stability. “If any president were to reintroduce fuel or forex subsidies, they would have to manage the loss of the gains achieved through their removal, leading to more borrowing and potentially exceeding all revenue through debt servicing,” he said. This scenario, according to Edun, could push Nigeria towards economic instability and a collapse of governance systems.