The Federal Government incurred a significant loss of N13.2tn in foregone revenue as a direct consequence of the implementation of its foreign exchange subsidy policy between 2021 and 2023, the World Bank has stated.
It said the government lost N2tn in 2021, N6.2tn in 2022, and N5tn in 2023. The amount forgone in revenue was due to its insistence on regulating the value of the naira against the dollar in the official exchange market but allowing a fair market value price at the parallel market.
This subsidy, designed to stabilise the currency and support certain sectors ultimately led to significant reductions in the government’s revenue streams during this period.
Last week Thursday, the minister of Finance, Wale Edun, at the launch of the World Bank Nigeria Development Update document, announced the termination of fuel and foreign exchange subsidies, marking the end of a long-debated policy.
Edun revealed that these subsidies had drained the country’s economy and will no longer be implemented by the government.
“Fuel and FX subsidies are extinguished,” Edun said, as he emphasised the financial strain these policies had imposed on the nation.
