The federal government discontinue the long standing subsidies on fuel and foreign exchange.
The announcement to end the longstanding fuel and foreign exchange subsidies in Nigeria was made by Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, during an event held in Abuja on Thursday, October 17.
According to Minister Edun, these subsidies have placed a significant financial burden on the country, costing over N10 trillion, which is equivalent to approximately 5% of Nigeria's Gross Domestic Product (GDP).
The government's aim in discontinuing these subsidies is to redirect the funds towards a new housing finance initiative. This plan involves the introduction of a mortgage scheme that will offer low interest rates, with the goal of boosting the construction sector and creating job opportunities for Nigerians.
During the same event, the Governor of the Central Bank of Nigeria, Olayemi Cardoso, explained the recent 0.5% increase in interest rates. He attributed this decision to prevailing inflation trends, and assured that future monetary policies will be guided by data-driven analysis.
Additionally, Bala Mohammed, the Governor of Bauchi State, expressed concerns over the inadequate federal allocations received by state governments, noting the difficulties they face in maintaining crucial infrastructure.
Governor Mohammed also highlighted the challenge of implementing the new N70,000 minimum wage, given the budget constraints faced by state governments.
The announcement and discussions at this event underscored the significant economic and policy changes taking place in Nigeria, with the government's decision to end fuel and foreign exchange subsidies being a major shift that will likely have widespread implications for the country's citizens and businesses.
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