The Executive Chairman of the Federal Inland Revenue Service, Zacch Adedeji, has stated that Nigeria’s fuel subsidy regime could have cost the country as much as N53 trillion, while the naira might have depreciated to about N3,500 per dollar if recent economic reforms had not been implemented.
Adedeji made the remarks while addressing stakeholders at a policy forum, where he highlighted the fiscal and macroeconomic implications of maintaining the subsidy system. According to him, the removal of fuel subsidy and other key reforms were necessary steps to stabilise the economy and prevent a deeper financial crisis.
He explained that the subsidy had become an unsustainable burden on government finances, consuming a significant portion of national revenue and limiting the capacity for critical investments in infrastructure, healthcare, and education. Without decisive action, he warned, the country would have faced severe fiscal strain and mounting debt obligations.
On the exchange rate, Adedeji noted that continued pressure on foreign reserves, driven partly by subsidy-related import demands, could have pushed the naira to unprecedented lows. He said the reforms introduced by the administration of Bola Ahmed Tinubu were aimed at correcting structural imbalances and restoring investor confidence.
The FIRS chairman further emphasised that while the reforms may have posed short-term challenges, including higher living costs, they are essential for long-term economic sustainability. He urged Nigerians to remain patient, noting that the benefits would become more evident as the policies take full effect.
Economic analysts have offered varying perspectives on the claims, with some agreeing that subsidy removal was inevitable, while others argue that stronger social safety nets should have been implemented to cushion the impact on vulnerable populations.
The Federal Government has repeatedly defended its decision to end the subsidy, stating that the funds saved are being redirected toward development projects and targeted interventions designed to support economic growth.
As debates over the reforms continue, Adedeji maintained that Nigeria is on a path toward greater fiscal discipline and economic resilience, stressing that difficult policy choices are often required to secure long-term national prosperity.