Wale Edun, Nigeria’s minister of finance and coordinating minister of the economy, revealed that the country has saved $20 billion through the removal of petrol subsidies and the adoption of market-based foreign exchange pricing.
Edun made the disclosure during an event in Abuja marking the first 100 days in office of Esther Walso-Jack, head of the civil service of the federation.
“An amount of five percent of GDP is what those two subsidies were costing when there was a subsidy on PMS; when there was petroleum product generally for a long time and when there was a subsidy of foreign exchange. Between them, they were costing five percent of GDP,” he said.
“If you say GDP was on average, let’s say $400 billion. We all know what five percent of that is – $20 billion of funds that could be going into infrastructure, health, social services, education.”
Edun explained that the savings from these measures are now being redirected into critical sectors such as infrastructure, health, education, and social services.
“The real change that has happened with the measures of Mr. President is that nobody can wake up and their target for the day or for the week or the month or the year is to get access to cheap funding, cheap funding exchange from central bank, which they can now flip,” Edun said.
“And overnight, they become wealthy from no value added for doing virtually nothing, except you know the right people.
Similarly, they can no longer try and be part of a new peak market and very inefficient petrol subsidy regime as a way of making money overnight.”
