Subsidy Return Will Reverse Economic Gains – Minister

Subsidy Return Will Reverse Economic Gains – Minister

The Minister of Information and National Orientation, Mohammed Idris, has warned against restoring the petrol subsidy, saying it would undermine Nigeria’s improving fiscal position, weaken investor confidence and reverse the gains of President Bola Tinubu’s economic reforms.In an opinion article titled “Restoring Fuel Subsidy Will Reverse Nigeria’s Economic Gains,” published in some national dailies on Monday, Idris said a return to the old subsidy regime would almost immediately recreate the fiscal pressures, market distortions, scarcity and arbitrage incentives that made the system unsustainable in the past.“Restoring subsidy would almost instantly return Nigeria to the economic conditions of 2022,” he stated.He posed a series of opportunity-cost questions to supporters of subsidy restoration: whether the country should reinstate the subsidy or sustain student loans and consumer credit for young Nigerians; preserve higher allocations to states and local governments; continue funding roads, rail, power and security; or strengthen the fiscal capacity needed to expand healthcare, education and social protection.Idris recalled that in 2022, amid declining oil production and weak revenues, Nigeria spent about $10 billion on fuel subsidies. The World Bank had warned at the time that the spending diverted resources that could have supported education, healthcare, infrastructure and social protection.Citing the Federal Government’s “Nigeria’s Reform Scorecard: The Benefits, Costs and Harms Prevented,” he noted that subsidy savings released ₦15.8 trillion in resources for the Federation between June 2023 and December 2025. Of this, approximately ₦5.43 trillion accrued to the Federal Government, ₦6.52 trillion to states and ₦3.88 trillion to local governments. The figure, he clarified, represented resources freed within the wider fiscal system rather than a separate cash pool.These savings, according to the minister, have strengthened the ability of states and local governments to meet salary and pension obligations and invest in essential services. They have also supported federal spending of about ₦6.47 trillion on strategic infrastructure and more than ₦400 billion on major social investment programmes, including NELFUND, the MOFI Real Estate Investment Fund, MREIF and CREDICORP. Social transfers have reached more than 10 million Nigerian households.Idris further noted that Nigeria is already carrying an electricity subsidy estimated at ₦3.14 trillion over the same period, and that reintroducing petrol subsidy would place an additional strain on public finances.He pointed out that the Organised Private Sector and the wider economic community have also cautioned against reversing the reform.“Nigeria cannot build tomorrow’s economy by returning to yesterday’s unsustainable subsidy regime. We have moved beyond that model,” Idris said, urging Nigerians to view the reforms in the light of long-term economic stability and the need to build a stronger, more productive economy.

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