BTvNEWS

Edun Says Transparency, Fiscal Accountability, and Economic Recovery Drive Government’s Reform Agenda

By AbdulHakeem Mutiu Adejumo-Ajeseku, Abuja, Nigeria

BTvNEWS: The Federal Government has announced plans to publish a comprehensive report detailing the savings generated from the removal of fuel subsidies and foreign exchange subsidies, as well as how the funds have been utilized to support national development and meet key financial obligations.

Minister of Finance and Coordinating Minister of the Economy, Wale Edun, made the disclosure on Thursday during the 7th Africa Emerging Markets Forum held in Abuja. He said the forthcoming report reflects the administration’s commitment to transparency and accountability in the implementation of its economic reform policies.

According to the minister, the report will provide Nigerians with a clear breakdown of the savings accrued from the reforms and the specific areas where the funds have been deployed.

“We believe we owe Nigerians a duty to explain what we do. That is what transparency means,” Edun stated.

He explained that the reforms were introduced primarily to eliminate long-standing economic distortions and curb systemic corruption, rather than merely generate fiscal savings. However, he noted that the resulting savings have enabled the government to fulfill critical financial obligations and fund strategic intervention programmes.

Edun emphasized that the discontinuation of monetary financing did not eliminate government expenditure commitments.

“If you stop printing money, the spending does not disappear. You still have to finance the obligations that were previously funded through money creation. That is part of where the savings went,” he explained.

The minister further revealed that rising interest rates have significantly increased the government’s debt servicing burden.

“Instead of paying about eight per cent on our debt, we are now paying as much as 24 per cent. Debt obligations must be honoured when they fall due,” he said.

He acknowledged that the high cost of borrowing remains a major challenge, especially at a time when the economy requires increased investment to sustain growth and development.

To address this challenge, Edun disclosed that the Federal Government is developing a framework aimed at reducing the cost of capital without introducing new subsidies. The initiative, he said, will complement the efforts of the Central Bank of Nigeria (CBN) to curb inflation while supporting economic expansion.

The minister noted that the combined cost of fuel and foreign exchange subsidies previously accounted for approximately five per cent of Nigeria’s Gross Domestic Product (GDP). He stressed that correcting market distortions and restoring economic efficiency were the central objectives of the reforms.

According to him, part of the savings realized from the reforms has been utilized to settle the Federal Government’s Ways and Means obligations and support the implementation of the new national minimum wage.

Edun explained that prior to the reforms, government spending relied heavily on money creation, at a period when interest rates hovered around eight per cent and the national minimum wage stood at ₦30,000.

He also disclosed that the government has expanded its social intervention programmes, particularly cash transfers, to reach 15 million vulnerable households, a move he said has helped approximately 7.5 million Nigerians escape extreme poverty.

The minister reiterated the administration’s commitment to promoting investment, enhancing productivity, creating employment opportunities, and fostering sustainable private sector-led economic growth, while maintaining fiscal discipline.

The removal of the petrol subsidy shortly after President Bola Ahmed Tinubu assumed office in 2023 marked a significant shift in Nigeria’s fiscal architecture and revenue-sharing framework.

Economic analysts estimate that the subsidy removal has reduced fiscal expenditures by between ₦4 trillion and ₦6 trillion annually, creating additional resources for government spending and development initiatives.

Supporting this position, data from the Federation Account Allocation Committee (FAAC) indicate that ₦2.036 trillion was distributed among the Federal Government, states, and local government councils for March 2026, compared to ₦629 billion shared in March 2023.

The administration also terminated the Central Bank of Nigeria’s Ways and Means overdraft financing arrangement, which had been identified as a major contributor to liquidity expansion and inflationary pressures. In addition, foreign exchange reforms were introduced to unify multiple exchange-rate windows and improve transparency within the foreign exchange market.

Meanwhile, the Central Bank has maintained the Monetary Policy Rate (MPR) at 26.5 per cent during its 305th and 306th Monetary Policy Committee meetings.

The benchmark interest rate, which stood at 18.75 per cent in 2023, was increased by 400 basis points to 22.75 per cent in February 2024. Subsequent hikes pushed the rate to 27.5 per cent by the end of 2024 before moderating to its current level.

As part of its monetary tightening measures, the apex bank also raised the Cash Reserve Ratio (CRR) for commercial banks from 32.5 per cent to 45 per cent in early 2024 and later to 50 per cent, with the objective of absorbing excess liquidity and strengthening macroeconomic stability.

The planned publication of the subsidy and foreign exchange savings report is expected to provide greater public insight into the outcomes of the Federal Government’s reform agenda and reinforce confidence in its commitment to transparency, fiscal responsibility, and sustainable economic growth.