Morganable News/Public Interest
He also commended the Central Bank of Nigeria for what he described as a “superb job” in reducing inflation from above 30 per cent to below 15 per cent, while cautioning that sustained progress would require stronger fiscal backing from the government.
kaNo —
The Federal Government has pledged to publish a comprehensive breakdown of how funds saved from the removal of fuel and foreign exchange subsidies have been spent, in a move aimed at addressing growing public concern over the transparency and impact of recent economic reforms.
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, made the commitment on Thursday during the 7th Africa Emerging Markets Forum held in Abuja.
His remarks followed concerns raised by the Chief Economist and Senior Vice-President for Development at the World Bank Group, Indermit Gill, who questioned whether Nigerians were seeing tangible benefits from the reforms.
However, he stressed that many citizens remained unconvinced about the utilisation of the additional resources generated from these measures.
“It’s not clear to people whether savings and the additional resources have been spent,” Gill said, urging the government to demonstrate how the reforms have translated into improved living conditions.
He also commended the Central Bank of Nigeria for what he described as a “superb job” in reducing inflation from above 30 per cent to below 15 per cent, while cautioning that sustained progress would require stronger fiscal backing from the government.
Responding, Oyedele admitted that public skepticism was justified and assured Nigerians that a detailed report would be released within days.
“There was a question about the subsidy savings. Where has it gone to? I’ve heard this question so many times. And guess what? It’s a valid question,” he said.
According to the minister, the combined effect of removing fuel subsidies and what he termed the “subsidy on foreign exchange” represented about five per cent of Nigeria’s Gross Domestic Product. He emphasised that transparency remained a priority for the government.
“So where has the money gone to? In a few days, you will see the detailed analysis, because we believe that we owe a duty to explain what we do to the Nigerian people. That’s what transparency looks like,” Oyedele stated.
Reforms Designed To Correct Economic Distortion
He explained that the reforms were primarily designed to correct longstanding economic distortions rather than simply generate fiscal savings.
According to him, many critics failed to consider the potential consequences of maintaining the previous subsidy regime.
Additional expenditures, he said, included the implementation of the new ₦70,000 minimum wage and the expansion of social intervention programmes.
NELFUND Provide Support To Over 1.5million Students
Among such initiatives is the Nigerian Education Loan Fund, which the minister said has supported over 1.5 million students through tuition payments and monthly stipends, thereby easing access to higher education.
Despite improved revenue generation, Oyedele defended the government’s continued borrowing, noting that higher income does not automatically eliminate financing gaps when expenditure exceeds revenue.
“If you have a budget to spend 10 and you have a target of revenue of six, you need to borrow four. If you collect revenue of seven, you have exceeded your revenue target… but you still need to borrow three,” he explained, adding that borrowing remains sustainable if it yields returns that exceed its cost.
On the issue of poverty, the minister disagreed with the narrative often associated with the World Bank that recent reforms have worsened living conditions.
“The reform itself was a reset. We were living in fiscal illusions. So, we needed to stop deceiving ourselves so the country can move forward,” he said.
FG Focus On Translating Macroeconomic Gains
He added that the government’s current focus is on translating macroeconomic gains into tangible outcomes such as job creation, improved productivity, and shared prosperity.
Oyedele also revealed that the government is working on a new framework aimed at reducing the cost of capital without reintroducing subsidies.
Also speaking at the forum, the Director of Statistics at the Central Bank of Nigeria, Okpanachi Moses, presented findings from a study examining inflation dynamics across Sub-Saharan Africa.
The study, which covered 36 countries, found a mutually reinforcing relationship between food price volatility and inflation persistence, particularly in economies affected by conflict.
60% Of Household Spend Income On Food
According to Moses, households in many African countries spend between 40 and 60 per cent of their income on food, making them highly vulnerable to price shocks.
“What we found is, interestingly, a mutually reinforcing relationship between food price volatility and inflation persistence,” he said.
He noted that in conflict-affected economies, monetary policy tends to be less effective because food price shocks quickly translate into broader inflation. Nigeria, however, was classified among relatively stable economies in the region.
Moses advised central banks in fragile environments to exercise caution when deploying interest rate policies, arguing that structural interventions in food systems are often more effective in stabilising prices.
“Central banks in countries that are in conflict must apply demand-side tools with caution. What is critical is more investment towards restoring or stabilising the food system,” he said.
He further emphasised the importance of tailoring policy frameworks to country-specific realities, noting that ongoing reforms are essential for strengthening inflation-targeting mechanisms across the continent.
FG To End Electricity Subsidy
Meanwhile, the Federal Government has also announced plans to phase out electricity subsidies by 2027 as part of broader efforts to restore financial stability in the power sector.
The Minister of Power, Joseph Tegbe, disclosed this while addressing journalists on Friday, assuring Nigerians that there are no immediate plans to increase electricity tariffs.
Tegbe said the government is working towards eliminating what he described as the “so-called subsidy” in the power sector without worsening the burden on consumers or compromising electricity supply.
“I promise you, next year, by God’s grace, we will put a stop to this so-called subsidy in the power sector,” he said.
He added that the government is seeking the approval of President Bola Tinubu to clear an estimated ₦3.3 trillion in legacy debts within the sector, while also introducing sustainable financing mechanisms to prevent future accumulation.
The twin reforms in the fiscal and power sectors underscore the government’s broader strategy to stabilise the economy, enhance transparency, and create a more sustainable foundation for long-term growth.
