Nigeria has saved over N1 Trillion in two months following the scrapping of a costly fuel subsidy on petrol and move to unify its multiple exchange rates, President Bola Ahmed Tinubu said on Monday.
Food prices, commute rate and the cost of living soared following the country’s boldest reforms in decades, which labour unions say have hurt the poor, this has put Tinubu’s government under intense criticism.
In a television broadcast Monday, Tinubu defended his fuel subsidy removal policy, adding that it only benefited 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.
Tinubu acknowledged the hardship the subsidy removal had triggered but added that he was “monitoring the effects of the exchange rate and inflation on gasoline prices and would intervene if and when necessary.
The World Bank said last month Nigeria could save up to N3.9 trillion ($5.14 billion) this year alone after Tinubu’s reforms but cautioned against the rising inflationary pressures in the short term.
Labour unions are pressurising Tinubu to offer relief to households and small businesses. With the unions planning to embark on nationwide strike from Wednesday, Tinubu announced plans to provide mass transit buses for universities , fund farmers and small businesses with low-priced loans, he said.
“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.