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‘Without Reform, Naira Could Have Reached N3,500/$’

The Chairman of the Nigeria Revenue Service (NRS), Zacch Adedeji, has warned that Nigeria’s fuel subsidy bill could have ballooned to N53 trillion and the naira might have weakened to N3,500 per dollar if President Bola Tinubu had not removed the subsidy in 2023.

Speaking on Channels Television, Adedeji defended the controversial policy, rejecting claims that the government should have created fiscal buffers before ending the subsidy.

“Subsidy is not an income. It is like you are using your borrowing money to buy a product and that product is 10 naira, and you are selling it at 3 naira,” he said.

He argued that the subsidy was unsustainable, especially amid global oil market volatility and geopolitical tensions.

“The subsidy today would have been N53 trillion if Mr President has not removed it… With the ripple effects of that, the exchange rate today would have been around N3,500,” Adedeji stated.

The NRS Chairman insisted that retaining the subsidy would have left Nigeria with an unsustainable fiscal obligation, severely limiting resources for other sectors. “It is not a mistake. It is the best thing that has happened to the economy,” he said.

Adedeji praised Tinubu for prioritizing long-term stability over short-term politics. “We should commend Mr President for not being a politician… but focusing on having a solid foundation for this economy,” he added.

The subsidy removal, announced on May 29, 2023, triggered sharp increases in petrol prices and living costs. The government has maintained that the policy was necessary to reduce fiscal pressures and redirect resources toward productive sectors.

However, advisory firm CFG Advisory cautioned that the fiscal gains from subsidy removal have been absorbed by debt servicing, leaving little room for development projects or social interventions. The firm warned that this reality “weakens the reform narrative” and raises questions about the sustainability of the government’s fiscal strategy.