Abuja — Nigeria has saved over 1 trillion naira ($1.32 billion) in just over two months by scrapping a popular but costly subsidy on petrol and moved to unify its multiple exchange rates, President Bola Tinubu said on Monday.
Tinubu is under pressure as prices soar following the country’s boldest reforms in decades, which labour unions say have hurt the poor.
In a television broadcast, Tinubu defended his decision to scrap the petrol subsidy, which he said was benefiting a few elites and that the reforms would help boost the economy.
“In a little over two months, we have saved over a trillion naira that would have been squandered on the unproductive fuel subsidy which only benefited smugglers and fraudsters,” Tinubu said.
The president said he was aware of the hardship the subsidy removal had caused and was “monitoring the effects of the exchange rate and inflation on gasoline prices”, adding that he would intervene if and when necessary.
The World Bank said last month Nigeria could save up to 3.9 trillion naira ($5.14 billion) this year alone after Tinubu’s reforms but warned of growing inflationary pressures in the short term.
Unions are pressuring Tinubu to offer relief to households and small businesses. With the unions planning to strike from Wednesday, Tinubu announced plans to provide mass transit buses and fund farmers and small businesses with cheap loans, he said.
Earlier on Monday, the government said it had released grains to families, directed authorities in public schools to defer hiking school fees and will provide buses to ease transport costs for students. It also plans to set up a fund from the subsidy savings to build infrastructure.
“Sadly, there was an unavoidable lag between subsidy removal and these plans coming fully online. However, we are swiftly closing the time gap,” Tinubu said.
*Felix Onuah, Chijioke Ohuocha, Editing: MacDonald Dzirutwe & Nick Macfie – Reuters