The federal government has officially announced the termination of fuel and foreign exchange subsidies, marking the end of a long-debated policy.
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, made this declaration during the presentation of the Nigeria Development Update by the World Bank in Abuja on Thursday, October 17.
Edun revealed that these subsidies had drained the country’s economy, costing over N10 trillion, which amounts to five percent of Nigeria’s Gross Domestic Product (GDP).
“Fuel and FX subsidy are extinguished,” Edun said, as he emphasized the financial strain these policies had imposed on the nation.
The minister also announced a new government plan aimed at addressing unemployment, with a focus on housing finance.
This initiative, he explained, would feature a mortgage scheme offering near single-digit interest rates.
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.
At the same event, the Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, explained the rationale behind the recent half-percent interest rate hike.
He disclosed that the Monetary Policy Committee (MPC) had anticipated the latest inflation trends, which drove their decision to increase the rate.
“Policies and decisions will be based on evidence and data going forward,” Cardoso affirmed, underscoring the CBN’s commitment to data-driven policy formulation.
Bauchi State Governor, Bala Mohammed, also participated in the discussion. He expressed concern over the insufficient funds allocated to state governments through the Federation Account Allocation Committee (FAAC).
“The money coming from FAAC every month is not enough for state governments to provide infrastructure,” he lamented.
Mohammed criticized federal policies, noting that they had reduced the purchasing power of Nigerians. “These policies are not working,” he declared, pointing to the hardship being felt by the masses.
Regarding the implementation of the new N70,000 minimum wage, Governor Mohammed acknowledged the challenges states face.
“Some states can afford N70,000, some cannot. We in Bauchi State are paying the old minimum wage religiously. We’re looking at paying the new minimum wage as soon as possible,” he added.
He voiced concerns that while states are loyal to the wage law, the ability to fund essential infrastructure after meeting the new wage obligation remains a serious challenge. “We are about to be lynched,” he said, noting the pressure on state governments.
From the private sector, Amal Hassan, CEO of Outsource Global Limited, urged the federal government to create a more attractive environment for investors.
“The government must de-risk the economy to make it easy for investors to come in,” she said, adding that despite Nigeria’s negative global image, the country’s talent pool continues to attract attention from international businesses.
World Bank Senior Vice President and Chief Economist, Indermit Gill, wrapped up the discussion by calling on Nigeria’s economic units, Monetary, Fiscal, and other units, to collaborate more effectively.
He emphasised the need for unified efforts to drive economic reforms and growth.
