Wale Edun, Nigeria’s finance minister, revealed that the country has saved a significant amount of $20 billion as a result of the recent policy changes involving the removal of gasoline subsidies and the implementation of a market-based foreign exchange pricing system. These measures have led to considerable fiscal savings, which the government plans to redirect toward vital sectors such as infrastructure, health, and education. Edun made this statement during a recent ceremony in Abuja commemorating the first 100 days of Esther Walso-Jack’s tenure as the head of the Federation’s Civil Service.
Speaking on the financial impact of these reforms, Edun explained that subsidies, particularly the petrol subsidy (PMS) and foreign exchange subsidies, had been costing the country approximately five percent of its Gross Domestic Product (GDP) for an extended period. He pointed out that these subsidies had been a major drain on government resources, diverting funds that could otherwise be used for development. According to Edun, "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."
He further elaborated, saying, “If you say GDP was on average, let’s say $400 billion, we all know what five percent of that is – $20 billion – funds that could be going into infrastructure, health, social services, education.” This highlights the substantial fiscal burden these subsidies imposed on Nigeria, which is now alleviated through the removal of these financial drains. Edun emphasized that this saved amount of $20 billion could now be better utilized to promote development across critical areas such as healthcare, education, and other social services. This reallocation of funds is part of broader efforts to improve the nation’s economic growth and enhance the well-being of its citizens.
In addition to the financial savings, Edun noted the broader economic changes resulting from these policy shifts. He stated that the reforms have led to a more efficient and transparent market system, as they have eliminated the practice where individuals or groups could exploit subsidies for personal gain. “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 explained. He criticized this previous system, which allowed people to manipulate market conditions and create wealth without contributing to the economy. The changes, he added, have prevented individuals from exploiting these systems for personal enrichment, noting that “overnight, they become wealthy from no value added for doing virtually nothing, except you know the right people.”
Edun further emphasized that the reforms have also made it impossible for people to benefit from an inefficient and costly petrol subsidy regime. He stated that this has created a more level playing field, where economic growth will be driven by value-added contributions rather than the manipulation of inefficient subsidy programs. "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,” he said, highlighting the transformative nature of the reforms.
