Nigerian govt to publish detailed account of petrol subsidy savings — Finance minister

The federal government says it will soon publish a detailed account of how savings from the removal of petrol and foreign exchange subsidies have been utilised.

The Minister of Finance, Taiwo Oyedele, gave the assurance on Wednesday at the seventh Africa Emerging Markets Forum in Abuja, acknowledging that Nigerians had legitimate concerns over the management of the savings.

“Where has the money gone? I’ve heard this question so many times. And guess what? It’s a valid question,” Mr Oyedele said.

“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,” he added.

The minister said the combined cost of petrol subsidy and what he described as “subsidy on FX” amounted to about five per cent of Nigeria’s gross domestic product, GDP.

He explained that although the removal of the subsidies generated fiscal savings, the reforms were primarily aimed at eliminating economic distortions and corruption associated with the previous system.

“The money saving is also important,” he said.

Mr Oyedele said a significant portion of the savings had been used to finance government obligations previously funded through central bank financing, service higher debt costs resulting from tighter monetary conditions and implement the new national minimum wage.

He added that before the reforms, the government partly financed its expenditure through money creation while interest payments on public debt were significantly lower.

“If you stop printing, the spending doesn’t disappear. You need to finance the money you were printing before. That was part of where the savings went,” the minister said.