Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has disclosed that the country’s decision to remove the petrol subsidy and adopt market-based pricing for foreign exchange has saved the nation an estimated $20 billion.
At an event in Abuja marking the first 100 days in office of Head of the Civil Service of the Federation (HoSF), Esther Walso-Jack, Edun said the subsidy used to take five per cent of Nigeria’s Gross Domestic Product (GDP) before it was removed.
He emphasised the significance of the savings, breaking down their potential impact. “If you say GDP was on average, let’s say $400 billion, five per cent of that is $20 billion of funds that could be going into infrastructure, health, social services and education,” he noted.
Edun also said that the funds, which had been drained through subsidies, were being redirected into the government’s coffers for critical development. On the transformative nature of these economic reforms, Edun added: “The real change that has happened with the measures of Mr President is that nobody can wake up and their target is to get access to cheap funding; cheap funding exchange from the central bank, which they can now flip, and overnight, they become wealthy from no value added for doing virtually nothing, except you know the right people.”
The minister also talked about inefficiencies in the petrol subsidy system, which previously allowed individuals to profit significantly with minimal contribution to the economy.
“Similarly, they can no longer try to be part of a new peak market and very inefficient petrol subsidy regime as a way of making money overnight,” Edun added.
The Guardian
