Nigeria: Fuel Subsidy Removal, FX Reforms Will Save N8trn Annually

Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, disclosed that the Federal Government is set to save N8tn annually through the implementation of fuel subsidy removal and exchange rate unification policies.

Oyedele emphasized the need for the government to strategically channel these funds to improve the lives of Nigerians.

During a panel session at the Lagos Chamber of Commerce and Industry’s 2024 Economic Outlook and Budget Analysis, Oyedele highlighted the sacrifices made by the Nigerian people due to the fuel subsidy removal, resulting in N4tn annual savings.

Additionally, the Naira floatation policy is contributing another N4tn to the government’s coffers.

“The government should be intentional in spending this N8tn to positively impact the people, starting with addressing multidimensional poverty affecting over 133 million Nigerians,” urged Oyedele, emphasizing the importance of accountability in tracking expenditure.

The committee recommended the suspension of what they termed “nuisance taxes” to alleviate pressure on the populace.

Oyedele stressed the urgency of creating digital opportunities for Nigeria’s youth, asserting that the technology sector has the potential to generate $20bn annually.

Furthermore, Oyedele highlighted the need to promote exports, especially services and intellectual property, and addressed loopholes in diaspora remittances, suggesting amendments to ensure the funds arrive in foreign currencies.

Ben Akabueze, Director General of the Budget Office, expressed concerns about the country’s long-standing practice of operating budgets with deficits, accumulating a worrisome debt profile.

He emphasized the need to boost public revenues to address increasing demands for goods and services.

In response to criticisms, Akabueze clarified that the focus should be on effective spending rather than cutting expenditures. Bismarck Rewane, CEO of Financial Derivatives, added that key economic challenges persist, citing inflation, income inequality, and currency pressures.

This comprehensive insight into Nigeria’s fiscal landscape underscores the critical juncture the country faces, demanding strategic financial decisions for sustainable economic growth.