At the 59th annual Bankers Dinner of the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos, Central Bank of Nigeria Governor Olayemi Cardoso highlighted the financial burden that foreign exchange subsidies have placed on Nigeria's economy.
According to Cardoso, the federal government spent a staggering N6.2 trillion on foreign exchange subsidies in 2022, surpassing the N4.5 trillion allocated for fuel subsidies.
Governor Cardoso emphasized the disproportionate impact of these subsidies on national revenue, stating, "We have all been complaining about the loss of government revenue from fuel subsidies, yet the loss from the past FX subsidy regime far exceeds that of fuel.
The real elephant in the room is the losses from the FX regime." The economic implications of these subsidies are profound.
In June 2023, the Nigerian government took decisive steps by announcing the floating of the Naira and the removal of fuel subsidies.
These policy shifts have had a notable impact on the economy, with inflation soaring to 33.88 percent and the exchange rate reaching N1672.69 per dollar, compared to 22.41 percent and N463 between May and June 2023
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