•Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele
The federal government has said that it will soon publish details of how savings from the removal of fuel subsidy have been spent.
It said that savings from the removal of fuel subsidies and foreign-exchange market reforms have largely been absorbed by higher debt-servicing costs and increased government spending, as government officials labour to defend reforms blamed for worsening living conditions, reports Channels TV.
Speaking at the African Emerging Markets Forum in Abuja on Wednesday, Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said fuel subsidies and what he described as an implicit foreign-exchange subsidy had cost Nigeria roughly five per cent of GDP before their removal.
He said part of the savings had been absorbed by higher debt-servicing costs, with borrowing rates rising to as much as 24 per cent from around eight per cent before the reforms.
He said the government’s wage bill nearly doubled after the minimum wage was more than doubled to ₦70,000 ($51) a month.
The government has also increased spending on an education loan programme that provides tuition support and monthly stipends to more than 1.5 million students, he said.
I’ve heard this question so many times, and guess what? It’s a valid question,” Oyedele said.
Oyedele rejected a recent IMF assessment that millions of Nigerians remained in poverty despite reforms welcomed by investors, arguing that a temporary decline in real incomes was inevitable after subsidy removal.
He said the government would track progress through multidimensional poverty, real per-capita income growth, and income inequality, rather than by headline GDP growth alone.
