The Nigerian government’s recent announcement regarding the elimination of fuel and foreign exchange subsidies marks a significant shift in economic policy.
Edun made this known during the presentation of the Nigeria Development Update by the World Bank in Abuja on Thursday.
“Fuel and FX subsidies are extinguished,” he said, noting that the twin policies had imposed financial strain on Nigeria.
Edun emphasized that these subsidies, which cost the economy over N10 trillion—about 5% of GDP—had been a financial burden.
This follows the minister’s announcement of a new government initiative aimed at tackling unemployment, with an emphasis on housing finance.
“The government expects this approach to boost construction activities and generate significant job creation.
“The plan will be anchored around mortgage and housing financing,” Edun stated.
Earlier, Mr. Olayemi Cardoso, the Governor of the Central Bank of Nigeria (CBN), outlined the reasoning behind the recent half-percent increase in the interest rate, now set at 26.75 percent.
He emphasized that the policies and measures implemented to address the Naira crisis and rising inflation are grounded in empirical data and deemed essential.
“Policies and decisions will be based on evidence and data going forward”, he said.
Meanwhile, at the event, Bala Mohammed, the Governor of Bauchi State, criticized the policies introduced by the Federal Government.
He stressed that these policies are responsible for the hardships being experienced by Nigerians nationwide.
“These policies are not working,” he declared.
Recall that in June 2023, the Nigerian government announced fuel and FX subsidies removal.
Consequently, in the last months, the country’s fuel price and FX exchange rate surged to N1030 per liter and N1660.49 from N195 per liter and N461 per dollar in May last year.
This comes as Nigeria’s inflation rose to 32.70 percent in September from 20.41 percent in May 2023.
