The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has warned that restoring petrol subsidies could weaken the naira, potentially pushing the exchange rate to between ₦3,000 and ₦4,000 per dollar.
Oyedele gave the warning during a press briefing at the annual meetings of the International Monetary Fund (IMF) and the World Bank in Bangkok, Thailand.
According to the minister, reversing the removal of petrol subsidies could trigger capital flight, reduce investors’ confidence in the Nigerian economy and increase the cost of borrowing.
He explained that investors, both within and outside Nigeria, were concerned about the possibility of the Federal Government abandoning its economic reforms ahead of the 2027 general elections.
Oyedele said even a statement suggesting that the government was considering bringing back petrol subsidies could cause immediate reactions in the financial markets.
He warned that such a development could put additional pressure on the naira, increase airfares and make imported goods more expensive.
The minister added that wealthy Nigerians, business owners and middle-class investors could also move their funds into foreign currencies to protect their investments, further increasing demand for dollars.
He maintained that ordinary Nigerians would ultimately bear the consequences through higher import costs, rising prices of goods and services, and increased economic hardship.
Oyedele also clarified that the Nigerian National Petroleum Company Limited’s temporary reduction in petrol retail margins should not be interpreted as a return to fuel subsidy.
According to him, the decision was a commercial arrangement by the company to make petrol more affordable, rather than a subsidy funded by public money.
Tinubu Says He Has No Regrets Over Subsidy Removal
President Bola Tinubu has maintained that he has no regrets about removing the petrol subsidy, insisting that Nigeria cannot afford to return to the previous system.
The President spoke at an event titled Together Till 2027: An Evening with Original City Boy, organised by the City Boy Movement alongside the Relax, Tinubu Is Fixing Nigeria movement at the Presidential Villa in Abuja.
Tinubu compared Nigeria’s economic challenges to the biblical and Quranic account of Moses leaving Egypt, arguing that the country should continue moving forward instead of returning to its previous economic arrangements.
He said the difficult decisions taken by his administration were necessary to reposition the economy and create a better future for Nigerians.
According to the President, the country faced serious financial challenges when he assumed office in May 2023, including pressure on foreign reserves, mounting obligations and difficulties in meeting financial commitments.
He said his administration had undertaken reforms to rebuild the tax system and address the country’s economic problems.
Tinubu also defended his decision to remove petrol subsidies on his first day in office, stating that the government lacked the resources to continue funding the scheme.
He urged young Nigerians supporting his administration to educate voters about its policies and encourage eligible citizens to obtain their Permanent Voter Cards (PVCs) ahead of the 2027 general elections.
The President also praised the City Boy Movement, led by his son, Seyi Tinubu, for mobilising young people and establishing structures across states, local government areas and wards.
He assured young Nigerians that his administration would continue to prioritise their future, pointing to the Nigerian Education Loan Fund (NELFUND) as one of its initiatives. He said more than one million students had received support through the programme.
Shettima Says Economy Could Have Collapsed Without Reforms
Vice President Kashim Shettima also defended the administration’s economic policies, arguing that Nigeria’s economy could have collapsed if Tinubu had failed to take difficult decisions.
Shettima said the reforms had helped reposition the economy and pointed to reported economic growth of 4.43 per cent in the previous quarter, as well as foreign reserves approaching $60 billion.
He argued that although Nigerians had experienced significant hardship, the situation could have been worse without the government’s interventions.
The Vice President urged Nigerians to recognise the administration’s efforts rather than condemn its policies, adding that the government was working on measures to address challenges in the agricultural sector.
Shettima expressed optimism that food prices would decline in the coming weeks as the government introduced additional measures to improve agricultural production and ease the cost of living.
He also highlighted investments in infrastructure and the student loan programme as part of the administration’s efforts to support economic development.
The Vice President called on young Nigerians to communicate the government’s policies to citizens and help explain the reasons behind its economic decisions.
ADC Challenges Oyedele to Provide Evidence
Meanwhile, the African Democratic Congress (ADC) Presidential Campaign Council has challenged Oyedele to provide evidence supporting his prediction that restoring petrol subsidies could push the naira to ₦4,000 per dollar.
The council’s Director of Media and Publicity, Kola Ologbondiyan, accused the Federal Government of using fear to discourage public debate about the possibility of bringing back fuel subsidies.
Ologbondiyan argued that Nigerians deserved to see the economic models and calculations behind the minister’s projection instead of being presented with alarming forecasts.
Speaking to Vanguard, he described Oyedele’s statement as an attempt to frighten Nigerians and questioned the basis for predicting such a sharp depreciation of the naira.
He said the government should identify the investors whose concerns informed the warning and explain how their projections were calculated.
Ologbondiyan also argued that Nigeria was not the only country to consider or operate subsidy arrangements, insisting that any proposal to restore fuel subsidies should be assessed on its economic merits.
He dismissed the projected exchange rate as unrealistic and called on the minister to make the evidence supporting his position available to the public.
The ADC’s position comes as its presidential candidate, Atiku Abubakar, has promised to restore fuel subsidies if elected in 2027, arguing that the policy would help cushion the hardship faced by Nigerians.
The disagreement highlights the continuing debate over the economic consequences of subsidy removal, with the Federal Government defending its reforms while opposition figures advocate alternative measures to reduce the cost of living.
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