Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, defended the recent economic reforms implemented by President Bola Tinubu’s administration, stating that the floating of the naira and the removal of fuel subsidies were necessary measures, not options.
Speaking during Channels Television’s Independence Day special event, titled “Nigeria’s Challenging Economy: Strategies for Recovery,” Oyedele addressed widespread concerns about the economic hardships faced by Nigerians. “There are two very important policies of the government that people blame for the economic hardship: the fuel subsidy reduction and the floatation of the naira,” he explained. “We have to come to the realization that the conversation should not be about whether those things should have been done. That was not an option.”
Highlighting the fiscal challenges facing the government, Oyedele noted that Nigeria is currently grappling with over N7 billion in foreign exchange backlogs. He emphasized that previous administrations had accumulated billions of dollars in debt against the nation’s reserves, contributing to the current economic collapse. “The government is spending over 96 percent of its revenue to service debt,” he added, underscoring the urgent need for reform.
Since taking office in May 2023, President Tinubu has initiated significant economic changes, including ending the costly fuel subsidy and lifting restrictions on the naira currency. Although government officials assert that these measures are critical for attracting foreign investment, many Nigerians are currently facing the consequences of these reforms, including soaring inflation, tripled fuel prices, and a rapidly depreciating naira.
The World Bank, in its recent development update on Nigeria, acknowledged the necessity of these reforms while stressing the importance of sustaining and fully implementing them. The floatation of the naira, which previously operated under a multi-tier exchange rate system with currency restrictions, has alleviated one of the primary concerns for foreign investors.
Despite the challenges, there are signs of gradual improvement; Nigeria’s inflation rate decreased to 32.15 percent in August, down from 33.40 percent in July 2024. However, the recent spike in petrol prices has had a cascading effect, significantly impacting transportation, food, and other living costs.
As Nigeria navigates these turbulent economic waters, Oyedele’s remarks highlight the government’s commitment to implementing tough but essential reforms aimed at stabilizing the economy and fostering growth in the long term.
