The Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, has outlined the impact of the Federal Government’s economic reforms, particularly the removal of fuel subsidy and the unification of the foreign exchange market.

Speaking to the media and stakeholders, Oyedele highlighted how the reforms have benefited Nigerians, the economic crises they helped avert, and the government’s plans to sustain the gains and translate macroeconomic improvements into better living conditions for citizens.

A critical assessment of the reforms suggests that the decision by President Bola Tinubu to remove fuel subsidy in 2023 was one of the most consequential economic decisions of his administration. Had the subsidy regime continued, Nigeria could have faced even more severe fiscal pressures, currency instability, fuel shortages and widespread economic disruption.

According to Oyedele, the reforms have created room for increased wages, timely payment of salaries and pensions, settlement of pension arrears and gratuities, infrastructure development, expanded access to student loans and credit, housing support, agricultural interventions and social transfers. They have also helped restore investor confidence and improve energy security despite global economic shocks.

How the Reforms Benefit Average Nigerians

1. Wage increases and timely payment of salaries and pensions.
2. Settlement of pension arrears and gratuities owed to retirees.
3. Wealth creation for millions of Nigerians through capital market gains.
4. Transformative infrastructure development nationwide.
5. Top globally friendly student loan scheme (NELFUND) and affordable consumer/SME credit.
6. Subsidized mortgage and housing schemes, plus social transfers to the most vulnerable (15 million households).
7. Agricultural interventions strengthening food security.
8. Fuel availability and energy security despite global shocks.
9. Return of investor confidence, driving local and international investment.
10. Tax exemption for low-income earners and small businesses, and a friendlier tax environment.

The Harms the Reform Prevented

1. Bankruptcy of many states and local governments.
2. Hyperinflation from unchecked printing of the naira.
3. Total collapse of the naira’s value.
4. Fuel scarcity and disruption of economic activities.
5. Greater poverty across the country.
6. Worsening insecurity fuelled by economic crisis.
7. Mass business collapse and deeper job losses.
8. Corruption in FX allocation and the fuel subsidy scheme.
9. Much higher interest rates.
10. Multiplicity of taxes deepening the taxation of poverty.

Looking Ahead

1. We will stay the course of reform — no reversals.
2. Accelerate translation of macro gains into meaningful impact for every household.
3. Implementation of the Nigeria Tax Act will continue.
4. Further fiscal reforms addressing challenges in our budgeting, reporting and accountability systems.
5. We expect the tax-to-GDP ratio to keep climbing.
6. Push headline inflation towards a single digit.
7. Keep the exchange rate unified and predictable.
8. Reduce poverty and deepen agricultural interventions to bring food prices down.
9. Work with states and local governments to deliver shared prosperity.
10. Improve the quality and priority of spending in the most impactful areas.