• conomic reality created no room for buffer before subsidy removal
• Naira value trapped in rigidity crisis, heading to N3,500/$ before market liberalisation
• Citizens already enjoying benefits of Tinubu interventions

The Federal Government would have been spending about N53 trillion yearly on petrol subsidy if President Bola Tinubu had not removed the scheme, the Chairman of the Nigeria Revenue Service (NRS), Zacch Adedeji, has argued.

Adedeji, who spoke yesterday on Sunday Politics, a weekly programme of Channels TV, described the removal of petrol subsidy, exchange rate liberalisation and other measures introduced by the Tinubu administration as difficult but necessary decisions to prevent a deeper economic crisis.

He said the naira would have depreciated to as low as N3,500/$, arguing that the N460/$ Tinubu inherited was not a true reflection of the local currency’s value.

The NRS boss argued that the subsidy regime was fundamentally unsustainable because the government was effectively borrowing to procure petrol and selling it to consumers at a heavily discounted price, creating a wide hole in its balance sheet.

According to him, the scale of the subsidy would have become overwhelming amid rising global energy costs and geopolitical tensions, with the projected N53 trillion subsidy translating to over three/fourth of the Federal Government’s budget.

He said: “The subsidy today would have been N53 trillion. If the President had not removed it, given what is happening in Iran, given what is happening globally and the total budget of Nigeria today is N68 trillion, imagine that this unsustainable subsidy is over 76 per cent of the Nigerian budget.”

Adedeji also said the exchange rate would have deteriorated to about N3,500 to a dollar had the reform not been implemented, insisting that Nigerians needed to consider what the country would have faced if the previous system had continued.

He rejected the argument that the government should have created a financial buffer before removing the subsidy, describing the idea as a gross misunderstanding of the scheme’s nature.

“What do you call a buffer? Subsidy is not an income. It is like you are borrowing money to buy a product for N10 and selling it for N3. You are borrowing money to buy it,” he said.

According to him, the decision was therefore not a mistake but “the best thing that has happened to this country”, arguing that Tinubu chose to prioritise the long-term stability of the economy over short-term political considerations.

Adedeji also pushed back against criticisms that the administration’s economic policies had favoured the elite at the expense of ordinary Nigerians, asking critics to identify what they would have done differently, given the country’s situation.

He cited the student loan programme, the removal of petrol subsidy, exchange-rate unification and the tax reform as evidence that the administration had sought to address what he described as “fundamental distortions” in the economy.

He said the government had also introduced compressed natural gas (CNG) as part of efforts to cushion the impact of higher petrol prices, particularly for Nigerians who depend on public transportation.

Adedeji argued that the benefits of the reforms should not be judged solely on the basis of immediate household pressures, noting that macroeconomic improvements would take time to translate into broader welfare gains.

“Rome was not built in a day,” he said, insisting that the government had spent the first three years fixing the fundamentals of the economy.

He pointed to increased investment, stronger corporate earnings, and banking recapitalisation as evidence that the reforms were beginning to reshape the economy’s productive base.

According to him, banks had raised N4.6 trillion through the recapitalisation exercise, with the bulk of the funds raised locally, while private investment had also increased, demonstrating the strong confidence in the economy.

He said improved business conditions would eventually translate into increased employment as companies expanded their operations.

The NRS chairman further linked the reforms to huge investment in the downstream oil sector, arguing that the removal of subsidy created the conditions for private refineries to operate on a market-driven basis.

Adedeji said Nigeria had moved from dependence on imported petroleum products to becoming an exporter of refined products, adding that the country would begin exporting PMS.

He faulted the claim that the gains from reforms had yet to translate into microeconomic improvement, wondering what the higher minimum wage and states’ ability to pay regularly imply if they are not positive gains for households.

Adedeji pointed to higher allocations to the three tiers of government as another benefit of the reforms, saying monthly allocations had risen significantly compared with when he served as commissioner for finance.

He maintained that the increased revenue was being distributed through the Federation Account in line with constitutional provisions rather than held in a separate pool that could simply be deployed as a “buffer”.

In naira terms, minimum wage has been increased by over 100 per cent – from N30,000 to N70,000. But in real terms, the monthly wage floor has fallen from $62 to about $51.