Subsidy Return Could Crash Naira to ₦4,000/$, Oyedele Says as ADC Demands Proof

LAGOS — Finance Minister Taiwo Oyedele has warned that bringing back petrol subsidy could trigger capital flight, undermine investor confidence and push the naira towards ₦3,000, ₦3,500 or even ₦4,000 to the dollar.

The warning has intensified the political debate over the Tinubu administration’s economic reforms, with the African Democratic Congress (ADC) Presidential Campaign Council demanding evidence to support the minister’s forecast.

Oyedele spoke at a press briefing during the International Monetary Fund and World Bank Annual Meetings in Bangkok, Thailand, yesterday, cautioning against any move to reverse the removal of petrol subsidy.

The ADC, whose presidential candidate, Atiku Abubakar, has promised to restore subsidy if elected, accused the Federal Government of using fear to discourage Nigerians from debating the policy.

Minister warns against reversing reforms

Oyedele, who is also the Coordinating Minister of the Economy, said investors had repeatedly questioned whether the government would maintain its economic reforms as the 2027 election approaches.

He argued that even a public indication that President Bola Tinubu was considering restoring fuel subsidy could immediately unsettle the financial markets, increase borrowing costs and intensify economic pressure on Nigerians.

The minister said investors in domestic and international markets had largely discounted the opposition’s prospects but warned that a possible policy reversal could alter market expectations.

“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. Air fares would struggle, the naira would come under severe pressure, potentially moving towards N3,000, N3,500 or even N4,000. The very fuel people want subsidised would become far more expensive in naira terms,” he said.

Oyedele warned that Nigerians could face further economic hardship if investors responded by moving their money out of the country or shifting their holdings into dollars.

He said wealthy individuals, business owners and middle-class investors could also seek protection against currency depreciation by increasing their dollar holdings, thereby raising demand for foreign exchange.

According to him, the resulting pressure on the naira could make imported goods more expensive and push prices higher.

The minister also sought to distinguish the Nigerian National Petroleum Company Limited’s temporary reduction in petrol retail margins from a government-funded subsidy.

He said the reduction was a commercial decision and argued that a company choosing to accept lower profit margins to make a product more affordable should not automatically be regarded as providing or receiving a subsidy.

Tinubu announced the removal of petroleum subsidy on May 29, 2023, in Abuja. His administration subsequently floated the naira’s exchange rate and said the national budget had no provision for subsidy payments from June 2023.

ADC challenges government to publish economic model

The ADC Presidential Campaign Council rejected the minister’s projection and called on the Federal Government to explain how it calculated the potential exchange rate of ₦4,000 to the dollar.

Kola Ologbondiyan, the council’s Director of Media and Publicity, accused the government of attempting to discourage discussion about restoring fuel subsidy through alarming economic predictions.

Speaking to Vanguard, he said the minister should provide evidence rather than make projections without disclosing their underlying assumptions.

“The Minister of Finance is merely scaremongering. He cannot claim that a return to fuel subsidy will cause the naira to depreciate to ₦4,000 to the dollar without showing Nigerians the model behind that projection,” he said.

Ologbondiyan also questioned the government’s reliance on investors’ concerns, demanding details of the people responsible for the forecast and the calculations used to reach it.

“They should show Nigerians who is making these claims and explain how they arrived at an exchange rate of ₦4,000 to the dollar if fuel subsidy is reintroduced,” he said.

He maintained that Nigeria was not the only country to consider or operate a production subsidy and argued that the proposal should be evaluated on its economic merits.

“I do not believe this projection is realistic. It is fantasy,” he said.

Atiku has pledged to restore fuel subsidy if elected President, presenting the proposal as a means of cushioning the hardship Nigerians face. The position contrasts with Tinubu’s insistence that the country cannot reverse the decision.

Tinubu: No regrets over subsidy removal

President Tinubu has reaffirmed his commitment to the policy, declaring that he has no regrets about removing petrol subsidy and that Nigeria cannot return to what he described as Egypt.

He spoke at “Together till 2027: An Evening with Original City Boy”, a gathering organised by the City Boy Movement alongside the “Relax, Tinubu Is Fixing Nigeria” movement at the Old Banquet Hall of the Presidential Villa, Abuja.

The President praised the supporters who attended the event, saying they reminded him of his motivation for seeking the presidency and implementing difficult reforms.

“When I walked into this hall, I did not see a crowd. I saw Nigeria. I saw why I ran for the presidency of this country. I saw why I wake up every morning to work. I saw the reason. Now, I have no regret. I saw the future that belongs to you.

“I cannot describe the situation or the elation I felt hearing from one or two of you. The words I do not often say enough, I must say tonight: thank you very much. Thank you for standing with me. The road we have walked these past three years has not been easy. We took hard decisions that you heard from Kashim Shettima.

“I could listen to my political opponents promising a return to subsidy. Most of all, sometimes I remember my scripture studies, both in the Bible and the Holy Quran. When Moses left Egypt, they faced a challenge, and the Red Sea parted and gave way.

“You cannot ask Moses to go back to Egypt. We wake up with ideas, original thoughts and deep thinking to move this country forward. With your energy and support, we will never go back to Egypt.

“No regrets. Before I left home, I saw one of the greatest Chinese economic news reports, that the economy was growing by about 4.6 per cent. We are on the right trajectory. We are in good company. The economy is growing steadily. You will have a future, a future to believe in.”

Tinubu said his administration inherited a difficult financial situation, claiming that the country had limited resources, outstanding obligations to airlines and inadequate foreign reserves. He also criticised the previous reliance on printing money.

The President said his government had rebuilt the tax system and maintained that Nigeria could not borrow its way to prosperity.

He recalled his promise to end prolonged strikes by the Academic Staff Union of Universities (ASUU), saying a four-year university course should be completed within four years.

Tinubu also commended the City Boy Movement for building a political organisation that he said had millions of verifiable members across the country, with representation at state, local government, ward and polling-unit levels.

He praised its call centre and City Boy Care initiative, describing the movement’s activities as organised political engagement rather than mere publicity.

The President further highlighted the Nigerian Education Loan Fund (NELFUND), stating that more than one million students had received support through the scheme.

“The future of this country does not belong to me, and it does not belong to my generation. It belongs to you.

“I am very proud, once again, that when I signed the Student Loan Act, I had no regrets. Today, more than a million students have been supported through NELFUND.”

He urged young Nigerians to obtain their Permanent Voter Cards, encourage others to do the same and communicate the administration’s policies to voters.

Tinubu also praised his son, Seyi, the Patron of the City Boy Movement, for mobilising young people and urged him to continue serving the public.

“I am proud of all of you. But I will tell you what every father tells a son: you have only started. Do more, not less. Serve harder. Set an example that your own children, my grandchildren, will be proud to follow.”

The President reiterated his argument that subsidy removal was necessary because, according to him, the government no longer had the resources to sustain the payments.

Shettima credits reforms with economic recovery

Vice-President Kashim Shettima defended the President’s economic decisions, arguing that Nigeria’s economy could have collapsed had Tinubu avoided far-reaching reforms.

Shettima said the economy expanded by 4.43 per cent in the last quarter and that foreign reserves were hovering around $60 billion.

“The President took those far-reaching decisions. He had the courage of conviction and the knowledge to take those far-reaching decisions that repositioned the Nigerian economy, so that now the economy grew by 4.43 per cent in the last quarter.

“Most importantly, our foreign reserves are now hovering around the level of $60 billion. Remember how far we have come. It is only those who have been in the deepest valley that will appreciate how magnificent it is to be on a mountain top.”

The Vice-President said the country’s situation would have deteriorated considerably without the reforms, arguing that critics would otherwise have been describing an economic collapse.

“These people, by now, would be writing epistles about a collapsed economy from the comfort of their homes in Dubai or New York, or in marriage with their young Moroccan wives. I have not mentioned anybody’s name.”

Shettima acknowledged the hardship faced by Nigerians but insisted that the consequences could have been worse without the administration’s decisions.

He said the government would introduce further responses to agricultural challenges and expressed confidence that food prices would come down.

The Vice-President also urged young people to take the government’s message to the public, citing education loans and infrastructure investments as part of its efforts to reposition the economy.

City Boy Movement pledges support for Tinubu

Francis Shoga, Director-General of the City Boy Movement, said the organisation was committed to supporting the President and communicating his administration’s policies to young Nigerians.

He described the movement’s members as supporters prepared to organise, serve and participate in national development.

Shoga said the group intended to promote patriotism, responsible participation and confidence in the government’s Renewed Hope agenda.

The President, in turn, thanked youth support groups in Nigeria and abroad, saying their efforts had helped communicate his administration’s policies.

He assured members of the City Boy Movement that young people would not be left behind, insisting that the country’s future belonged to the next generation.

The competing positions over subsidy restoration have placed the policy at the centre of the emerging political debate ahead of the 2027 general election, with the government defending its reforms and the ADC demanding evidence for warnings about the potential consequences of a reversal.

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