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Restoring fuel subsidy will reverse Nigeria’s economic gains

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The renewed call for the restoration of petrol subsidy under any guise demands a clear-eyed examination of what Nigeria has gained from reform and what the country would have to surrender by reversing course.

The scale of the problem is important to remember. In 2022, when Nigeria was struggling with declining oil production and weak revenues, the country spent about $10 billion on fuel subsidies. The World Bank also warned that the subsidy was consuming resources that could otherwise have gone into education, healthcare, infrastructure and social protection.

This is the system that the administration of President Bola Ahmed Tinubu inherited and boldly decided to change.

At the Federal Government’s recent presentation of “Nigeria’s Reform Scorecard: The Benefits, Costs and Harms Prevented,” the Honourable Minister of Finance and Coordinating Minister of the Economy, Dr Taiwo Oyedele, disclosed that subsidy savings mobilised N15.8tn in resources for the Federation between June 2023 and December 2025.

Of this amount, approximately N5.43tn accrued to the Federal Government, N6.52tn to states and N3.88tn to local governments.

It is important to explain these figures honestly. The N15.8tn is not sitting in a government account as a separate pool of cash called “subsidy savings.” It represents resources released within the Federation’s wider fiscal system and made available across the three tiers of government.

The additional resources available to states and local governments have strengthened their capacity to meet salaries and pensions obligations and to invest in infrastructure and essential services, including primary healthcare, basic education, roads and other needs. At the federal level, the broader fiscal space created by the reforms has supported major investments and obligations that would have been considerably more difficult to sustain under the old subsidy regime.

The Federal Government’s Reform Scorecard records approximately N6.47tn in additional expenditure on strategic infrastructure, covering major investments in transport, housing, agriculture, security and other strategic projects. These include major national corridors such as the Lagos-Calabar Coastal Highway, Sokoto-Badagry Superhighway, and the Trans-Sahara Superhighway.

The reforms have also made room for significant investments in human capital and social support. Over 10 million Nigerian households have benefited from social transfers. The administration has also extended more than N400bn towards landmark social investment initiatives like the Nigerian Education Loan Fund, NELFUND (N223.8bn), the MOFI Real Estate Investment Fund, MREIF (N150bn) and the Nigerian Consumer Credit Corporation, CREDICORP (N50bn).

Renewed domestic and foreign investor confidence founded on the reforms has helped make the Nigerian stock market the world’s best-performing in 2026, pushed the external reserves to the highest level in almost 20 years, and helped the country grow oil production to exceed its OPEC quota for the first time in years.

The additional fiscal space has also supported wage adjustments, minimum-wage obligations and pensions, while expanding the capacity for investments in education, healthcare, agriculture, electricity, security and other critical areas of national development.

Nigeria is also entering a new phase in its petroleum sector, with marked expansion in domestic refining capacity. Reversing policy now will undermine this progress and introduce fresh uncertainty for investors at precisely the time Nigeria should be consolidating domestic refining and strengthening energy security.

See also  Audit uncovers over N61bn payment breaches in NNPCL

Our Reform Scorecard also assesses the economic harm that the reforms have helped Nigeria avert. Had the subsidy regime remained unaddressed, petrol scarcity would have returned, pushing prices above N3,000 per litre on the black market. The legacy Ways and Means financing, which stood at about N30 trillion in May 2023 and has since been curtailed, would have doubled to N60 trillion or more. The Scorecard projects that, without the reforms, the inherited situation of 27 States unable to reliably pay salaries would undoubtedly have worsened.

There is another important argument being overlooked. Nigeria already carries a second energy subsidy, on electricity consumption, which cost the country an additional N3.14tn between June 2023 and December 2025. This subsidy helps bridge the gap between actual power production costs and the capped tariffs paid by most consumers. Reintroducing a petrol consumption subsidy on top of this would deal a double blow to Nigeria’s fiscal position.

The above illustrates an important point: restoring the subsidy would almost instantly return Nigeria to the economic conditions of 2022, recreating the same fiscal pressures, distortions, scarcity and incentives for arbitrage that made the old system unsustainable in the first place.

We are not claiming that the reforms have solved all of Nigeria’s economic challenges; there is indeed still much work to be done to translate improved fiscal capacity into better services, jobs, infrastructure and living standards. But the proper response to the hardship associated with reform is not to dismantle the reform; it is to accelerate the benefits – which remains what the Tinubu administration is resolutely focused on.The objective is clear: to move public resources away from subsidising consumption and towards investing in the Nigerian people and the productive foundations of lasting prosperity.

This is also why the debate over restoring subsidy must ultimately come down to hard choices. Do we restore petrol subsidy, or sustain student loans and consumer credit for young Nigerians? Do we restore subsidy, or preserve higher allocations to states and local governments? Do we restore subsidy, or continue funding roads, rail, power and security? Do we restore subsidy, or strengthen the fiscal capacity required to expand healthcare, education and social protection for vulnerable Nigerians?

It is equally significant that the Organised Private Sector and the wider economic community have cautioned against reversing the reform, recognising that fiscal sustainability, policy stability and a competitive downstream petroleum sector are essential to investment, job creation and economic growth.

Nigeria cannot build tomorrow’s economy by returning to yesterday’s unsustainable subsidy regime. We have moved beyond that model.

We do not downplay or deny the challenges associated with subsidy removal and other major reforms. President Bola Tinubu and his administration are daily working – and succeeding – at translating these sacrifices into improved living standards, stronger public services and greater economic opportunities for the Nigerian people.

Idris is the Minister of Information and National OrientationRestoring fuel subsidy will reverse Nigeria’s economic gains

The renewed call for the restoration of petrol subsidy under any guise demands a clear-eyed examination of what Nigeria has gained from reform and what the country would have to surrender by reversing course.

See also  Fuel price: Tinubu moves to end burden on Nigerians

The scale of the problem is important to remember. In 2022, when Nigeria was struggling with declining oil production and weak revenues, the country spent about $10 billion on fuel subsidies. The World Bank also warned that the subsidy was consuming resources that could otherwise have gone into education, healthcare, infrastructure and social protection.

This is the system that the administration of President Bola Ahmed Tinubu inherited and boldly decided to change.

At the Federal Government’s recent presentation of “Nigeria’s Reform Scorecard: The Benefits, Costs and Harms Prevented,” the Honourable Minister of Finance and Coordinating Minister of the Economy, Dr Taiwo Oyedele, disclosed that subsidy savings mobilised N15.8tn in resources for the Federation between June 2023 and December 2025.

Of this amount, approximately N5.43tn accrued to the Federal Government, N6.52tn to states and N3.88tn to local governments.

It is important to explain these figures honestly. The N15.8tn is not sitting in a government account as a separate pool of cash called “subsidy savings.” It represents resources released within the Federation’s wider fiscal system and made available across the three tiers of government.

The additional resources available to states and local governments have strengthened their capacity to meet salaries and pensions obligations and to invest in infrastructure and essential services, including primary healthcare, basic education, roads and other needs. At the federal level, the broader fiscal space created by the reforms has supported major investments and obligations that would have been considerably more difficult to sustain under the old subsidy regime.

The Federal Government’s Reform Scorecard records approximately N6.47tn in additional expenditure on strategic infrastructure, covering major investments in transport, housing, agriculture, security and other strategic projects. These include major national corridors such as the Lagos-Calabar Coastal Highway, Sokoto-Badagry Superhighway, and the Trans-Sahara Superhighway.

The reforms have also made room for significant investments in human capital and social support. Over 10 million Nigerian households have benefited from social transfers. The administration has also extended more than N400bn towards landmark social investment initiatives like the Nigerian Education Loan Fund, NELFUND (N223.8bn), the MOFI Real Estate Investment Fund, MREIF (N150bn) and the Nigerian Consumer Credit Corporation, CREDICORP (N50bn).

Renewed domestic and foreign investor confidence founded on the reforms has helped make the Nigerian stock market the world’s best-performing in 2026, pushed the external reserves to the highest level in almost 20 years, and helped the country grow oil production to exceed its OPEC quota for the first time in years.

The additional fiscal space has also supported wage adjustments, minimum-wage obligations and pensions, while expanding the capacity for investments in education, healthcare, agriculture, electricity, security and other critical areas of national development.

Nigeria is also entering a new phase in its petroleum sector, with marked expansion in domestic refining capacity. Reversing policy now will undermine this progress and introduce fresh uncertainty for investors at precisely the time Nigeria should be consolidating domestic refining and strengthening energy security.

See also  Igbo traders must move beyond Chinese competition – Otti

Our Reform Scorecard also assesses the economic harm that the reforms have helped Nigeria avert. Had the subsidy regime remained unaddressed, petrol scarcity would have returned, pushing prices above ₦3,000 per litre on the black market. The legacy Ways and Means financing, which stood at about ₦30 trillion in May 2023 and has since been curtailed, would have doubled to ₦60 trillion or more. The Scorecard projects that, without the reforms, the inherited situation of 27 States unable to reliably pay salaries would undoubtedly have worsened.

There is another important argument being overlooked. Nigeria already carries a second energy subsidy, on electricity consumption, which cost the country an additional N3.14tn between June 2023 and December 2025. This subsidy helps bridge the gap between actual power production costs and the capped tariffs paid by most consumers. Reintroducing a petrol consumption subsidy on top of this would deal a double blow to Nigeria’s fiscal position.

The above illustrates an important point: restoring the subsidy would almost instantly return Nigeria to the economic conditions of 2022, recreating the same fiscal pressures, distortions, scarcity and incentives for arbitrage that made the old system unsustainable in the first place.

We are not claiming that the reforms have solved all of Nigeria’s economic challenges; there is indeed still much work to be done to translate improved fiscal capacity into better services, jobs, infrastructure and living standards. But the proper response to the hardship associated with reform is not to dismantle the reform; it is to accelerate the benefits – which remains what the Tinubu administration is resolutely focused on.

The objective is clear: to move public resources away from subsidising consumption and towards investing in the Nigerian people and the productive foundations of lasting prosperity.

This is also why the debate over restoring subsidy must ultimately come down to hard choices. Do we restore petrol subsidy, or sustain student loans and consumer credit for young Nigerians? Do we restore subsidy or preserve higher allocations to states and local governments? Do we restore subsidy or continue funding roads, rail, power and security? Do we restore subsidy, or strengthen the fiscal capacity required to expand healthcare, education and social protection for vulnerable Nigerians?

It is equally significant that the Organised Private Sector and the wider economic community have cautioned against reversing the reform, recognising that fiscal sustainability, policy stability and a competitive downstream petroleum sector are essential to investment, job creation and economic growth.

Nigeria cannot build tomorrow’s economy by returning to yesterday’s unsustainable subsidy regime. We have moved beyond that model.

We do not downplay or deny the challenges associated with subsidy removal and other major reforms. President Bola Tinubu and his administration are daily working – and succeeding – at translating these sacrifices into improved living standards, stronger public services and greater economic opportunities for the Nigerian people.

Idris is the Minister of Information and National Orientation.

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DisCos earn N603bn as power offtake drops

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Electricity distribution companies collected N603.64bn from customers in the second quarter of 2026, despite a decline in the volume of electricity they received from the power market.

The figure was contained in the Nigerian Electricity Regulatory Commission’s second-quarter 2026 report, which showed that the average energy offtake by the DisCos at their trading points fell to 3,197.03 megawatt-hours per hour in the quarter.

The Q2 figure represented a 112.45MWh/h, or 3.40 per cent, decline from the 3,309.48MWh/h average recorded in the first quarter. Despite the decline in offtake, the DisCos recorded an overall offtake performance of 94.07 per cent during the quarter, against available partially contracted capacity of 3,398.41MWh/h.

According to the report, the DisCos received a total of 6,982.32 gigawatt-hours of electricity during the quarter but billed customers for only 5,812.31GWh. It stated, “This translates to an overall energy accounting efficiency of 83.24 per cent and represents a 0.24pp decrease compared to 2026/Q1 (83.48 per cent).”

The report further revealed that the naira value of electricity off-taken by the DisCos stood at N946.57bn, while the total value of energy billed to customers was N744.67bn.

This translated to a billing efficiency of 78.67 per cent, representing a decline of 0.57 percentage points from the 79.24 per cent recorded in the first quarter. At the collection stage, the DisCos recovered N603.64bn from the N744.67bn billed to customers, translating to a collection efficiency of 81.06 per cent.

The report said this represented an improvement of 2.11 percentage points from the 78.95 per cent recorded in Q1. However, the difference between the amount billed and the amount collected stood at N141.03bn during the quarter.

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The report also disclosed that the weighted average Aggregate Technical, Commercial and Collection losses across the 11 DisCos stood at 36.23 per cent in Q2.

It stated, “The ATC&C loss of 36.23 per cent is 19.31pp higher than the 2026 MYTO target (16.92 per cent) and translates to a cumulative revenue loss of N129.07 billion across all DisCos.”

The 36.23 per cent loss, however, represented a 1.21 percentage-point improvement from the 37.44 per cent recorded in Q1.

The report noted that all the DisCos failed to meet their ATC&C targets during the quarter, with “Kaduna DisCo recording the worst underperformance relative to the target (Actual – 67.70 per cent vs target – 18.18 per cent),” it stated.

On market obligations, the report said the cumulative upstream invoice payable by the DisCos stood at N410.38bn in Q2.

The amount comprised N326.46bn for generation costs from the Nigerian Bulk Electricity Trading Company and N83.92bn for transmission and administrative services provided by the market operator.

The DisCos collectively remitted N385.44bn, comprising N306.62bn to NBET and N78.82bn to the market operator, leaving an outstanding balance of N24.94bn. This represented a market remittance performance of 93.92 per cent, slightly lower than the 94.08 per cent recorded in Q1.

The report added that the Federal Government had taken responsibility for about 50 per cent, or N321.26bn, of the total generation costs through subsidies arising from the freezing of end-use customer tariffs at the rates applicable in July 2024.

Meanwhile, three international bilateral customers purchasing electricity from grid-connected generating companies paid $8.67m against an $18.84m invoice issued by the market operator during the quarter.

See also  Igbo traders must move beyond Chinese competition – Otti

This represented a remittance rate of 46.02 per cent. Domestic bilateral customers, on the other hand, paid N6.91bn against an invoice of N7.55bn, representing a remittance rate of 91.54 per cent.

Source: punchng.com

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Personal loans rise to N2tn as Nigerians borrow more

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Personal loans obtained by Nigerians rose to an estimated N2.06tn in May 2026, as consumer credit continued to expand amid persistent cost pressures and weak consumer spending, according to the latest Economic Report of the Central Bank of Nigeria.

The figure, calculated from data contained in the CBN’s May 2026 Economic Report, represents about 64.78 per cent of the N3.18tn total consumer credit outstanding during the month. The report covers developments in the real, fiscal, financial and external sectors of the economy.

The apex bank said consumer credit increased by 1.60 per cent from N3.13tn in April to N3.18tn in May, indicating that Nigerians borrowed an additional N50bn within one month.

It said, “Consumer credit outstanding increased by 1.60 per cent to N3.18tn from N3.13tn in the preceding month, driven by growth in personal and retail loans, which rose by 1.98 and 0.90 per cent, respectively.”

The CBN added, “Personal loans remained the dominant component of consumer credit, accounting for 64.78 per cent, while retail loans constituted 35.22 per cent.”

Based on the proportions reported by the apex bank, personal loans stood at approximately N2.06tn at the end of May, while retail loans amounted to about N1.12tn.

The 1.98 per cent month-on-month increase in personal loans suggests that the balance rose by roughly N40bn during the period. Retail loans, which include credit tied more directly to the purchase of goods and services, recorded a slower increase of 0.90 per cent.

The figures show that personal borrowing remained the main driver of Nigeria’s consumer-credit market, accounting for nearly two-thirds of outstanding credit.

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The increase came against a challenging operating environment for households and businesses. The CBN reported that economic activity remained weak in May, with its composite Purchasing Managers’ Index at 49.60 points, slightly higher than 49.40 points in April but still below the 50-point threshold separating expansion from contraction.

According to the bank, the contraction reflected subdued demand, declining new orders and elevated production costs. It also identified weak consumer spending and higher energy-related costs as pressures on the industry and services sectors.

Inflation also remained elevated during the period. Headline inflation increased to 15.93 per cent in May from 15.69 per cent in April, which the CBN attributed to persistent cost pressures and higher energy prices. However, month-on-month inflation slowed to 1.75 per cent from 2.13 per cent.

The combination of rising consumer credit and weak consumer spending suggests that households were increasingly accessing credit at a time when living and operating costs remained under pressure.

A recent report Enhancing Financial Inclusion & Advancement noted that four in every 10 Nigerians borrowing from formal financial institutions now take loans mainly for consumption and coping needs, as rising financial pressures increasingly push credit away from productive activities.

The 2026 Access to Financial Services in Nigeria Survey revealed that 40.8 per cent of formal borrowers used loans for coping and consumption, up sharply from 31.7 per cent in 2023.

The 9.1 percentage-point increase made coping and consumption the largest purpose of formal credit, overtaking productive enterprise borrowing, which fell from 40.2 per cent to 34.3 per cent during the same period.

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Borrowing for household assets also declined from 25.2 per cent to 23.4 per cent. The report warned, “Coping/consumption purposes rose from 31.7 per cent to 40.8 per cent; productive purpose fell from 40.2 per cent to 34.3 per cent. We need to ensure that credit builds productive capacity and does not produce distress.”

Formal credit use increased from six per cent of adults in 2023 to 10 per cent in 2026, with about 11.9 million Nigerians borrowing from regulated providers. When informal sources were included, 36 per cent of adults had access to some form of credit.

Credit use among informally employed Nigerians tripled from five per cent to 15 per cent, while borrowing among people aged 18 to 35 rose from four per cent to 10 per cent. Business owners recorded an increase from four per cent to 10 per cent, while farmers rose from two per cent to six per cent.

However, the report found significant distress among borrowers. About 45.8 per cent of formal-credit users reported some or serious repayment stress, while 83.8 per cent experienced ongoing financial stress.

Source: punchng.com

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NAFDAC seizes N300m banned drinks in Lagos

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The National Agency for Food and Drug Administration and Control has seized alcoholic beverages worth an estimated N300m packaged in sachets and PET bottles below 200ml during enforcement operations in Lagos State.

NAFDAC disclosed this in a statement shared on its Facebook page on Sunday, adding that some distributors and retailers involved in the sale of the prohibited products were arrested.

The agency said the enforcement operations were carried out at Ile-Epo Market, Ojuwoye Market in Mushin and Oke-Arin Market on Lagos Island.

“Officials evacuated several cartons of alcoholic beverages packaged in sachets and PET bottles below 200ml from these locations.

“Distributors and retailers were arrested during operations at Ile-Epo Market, while raids were also conducted at Ojuwoye Market, Mushin, and Oke-Arin Market, Lagos Island,” the statement said.

NAFDAC said investigations revealed that some distributors and retailers were hoarding the prohibited products amid increased demand and rising prices.

The agency said the enforcement was part of efforts to ensure compliance with the ban on the sale and distribution of alcoholic beverages packaged in sachets and PET bottles below 200ml.

It warned distributors, retailers and other operators against selling, distributing or hoarding the prohibited products.

“NAFDAC emphasises that the ban remains in force and warns distributors, retailers and other operators against the sale, distribution or hoarding of the prohibited products.

“The value of the seized products is estimated at N300m,” it stated.

PUNCH Metro reported on August 25 that NAFDAC ordered manufacturers of banned alcoholic beverages packaged in sachets and polyethylene terephthalate bottles below 200ml to recall the products nationwide or risk closure of their facilities.

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NAFDAC had also vowed to fully enforce the Federal Government-approved prohibition of alcoholic beverages packaged in sachets and PET or plastic bottles below 200ml, warning that the ban was irrevocable.

The agency had stated that the years of grace given to manufacturers by the Federal Government to stop producing the products had expired.

Source: punchng.com

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