In a national broadcast on Sunday, President Bola Ahmed Tinubu defended his administration’s decisions to remove the petrol subsidy and unify foreign exchange (FX) rates, describing them as vital for Nigeria’s economic progress and development.
The address came amid widespread protests against economic hardships and perceived governance failures.
Tinubu highlighted that the removal of the petrol subsidy, announced on May 29, 2023, ended decades of government support for fuel prices. This decision led to a sharp increase in petrol prices and a subsequent scarcity of the commodity.
As the policy impacted citizens’ daily lives, the Central Bank of Nigeria (CBN) unified the FX markets, collapsing multiple FX windows into a single investors and exporters (I&E) window.
This move, which significantly devalued the naira, contributed to soaring inflation and higher costs for essentials like food and transportation.
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The president acknowledged the painful impact of these policies but argued they were necessary to address long-standing economic issues.
“The petrol subsidy and multiple FX rates were a noose around Nigeria’s economic jugular,” Tinubu said. “These decisions were crucial to reverse decades of economic mismanagement and to prevent further economic stagnation.”
Tinubu assured that despite the hardships, Nigeria has made notable progress in the past 14 months.
He reported that aggregate government revenues have more than doubled to over 9.1 trillion Naira in the first half of 2024, thanks to measures aimed at improving financial management and blocking revenue leakages.
The president also noted significant improvements in the non-oil sector and a reduction in the percentage of revenue spent on debt service from 97% to 68%. Additionally, Nigeria has cleared around $5 billion in foreign exchange obligations without negatively impacting government programs.
Tinubu promised continued efforts to enhance governance and ensure that the benefits of economic reforms reach all citizens.
He also highlighted increased allocations to states and local governments from the federation account as a sign of the country’s improved financial health.
The president’s address comes as protests continue across Nigeria, driven by concerns over economic hardships and governance issues.
Tinubu called for understanding and patience as the country navigates these challenging economic reforms.