The Federal Government has officially terminated fuel and foreign exchange (FX) subsidies, a move that concludes a long-standing policy debate. The announcement was made by Wale Edun, Minister of Finance and Coordinating Minister of the Economy, during the World Bank’s Nigeria Development Update presentation in Abuja on Thursday, October 17.
Edun highlighted the significant financial burden these subsidies had placed on the nation, revealing they had drained over N10 trillion from the economy, equivalent to five percent of Nigeria’s Gross Domestic Product (GDP). “Fuel and FX subsidy are extinguished,” Edun declared, emphasizing the necessity of this decision to alleviate the financial strain on the country.
In response to rising unemployment, the government has introduced a new initiative centered on housing finance. This plan includes a mortgage scheme offering near single-digit interest rates, aiming to stimulate construction activity and create jobs. “The plan will be anchored around mortgage and housing financing,” Edun stated.
During the same event, Central Bank of Nigeria (CBN) Governor Mr. Olayemi Cardoso explained the rationale for the recent half-percent interest rate hike. The Monetary Policy Committee (MPC) had foreseen inflation trends, prompting the rate increase. “Policies and decisions will be based on evidence and data going forward,” Cardoso affirmed, highlighting the CBN’s commitment to data-driven policy-making.
Bauchi State Governor, Bala Mohammed, also participated in the discussion, expressing concerns over inadequate allocations to state governments from the Federation Account Allocation Committee (FAAC). “The money coming from FAAC every month is not enough for state governments to provide infrastructure,” he lamented. Mohammed criticized federal policies for diminishing Nigerians’ purchasing power, stating, “These policies are not working,” and underscoring the hardship faced by the masses.
On the new N70,000 minimum wage implementation, Governor Mohammed acknowledged varied challenges among states. “Some states can afford N70,000, some cannot. We in Bauchi State are paying the old minimum wage religiously. We’re looking at paying the new minimum wage as soon as possible,” he added. He expressed concern about balancing wage obligations with essential infrastructure funding, stating, “We are about to be lynched,” due to escalating pressure on state governments.
Amal Hassan, CEO of Outsource Global Limited, representing the private sector, urged the government to create a more inviting environment for investors. “The government must de-risk the economy to make it easy for investors to come in,” she said, acknowledging Nigeria’s talent pool as a draw for international businesses despite the country’s negative global image.
Recalled World Bank Senior Vice President and Chief Economist, Indermit Gill, called for enhanced collaboration among Nigeria’s economic units—Monetary, Fiscal, and others—to drive economic reforms and growth effectively. He emphasized the importance of unified efforts in fostering economic progress.
