Fuel subsidy return could push Naira to N4,000 per dollar - Finance Minister warns

The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has warned that returning to the fuel subsidy regime could trigger capital flight, undermine investor confidence and push the naira to N3,000, N3,500, or even N4,000 per dollar.

Oyedele gave the warning while speaking at the International Monetary Fund and World Bank Annual Meetings in Bangkok, Thailand, on Monday, October 19.

The minister ruled out reversing the government’s economic reforms, including fuel subsidy removal, and maintained that any signal that President Tinubu’s administration was contemplating or reinstating the subsidy would immediately affect financial markets, raise borrowing costs and worsen economic pressures on households.

“In all the meetings I have had, I came to a conclusion that the markets, including the domestic market, which you can read from the capital market, and the international market, have largely written off the opposition in Nigeria as being unserious.

If, for any reason, the President were to say we are merely considering the return of fuel subsidy, capital would react immediately.

Airfares would struggle, the naira would come under severe pressure, potentially moving towards 3,000, 3,500 or even 4,000. The very fuel people want subsidised would become far more expensive in naira terms.”  he said