Subsidy Removal Was Best Thing for Nigeria — NRS Chairman

The Chairman of the Nigeria Revenue Service (NRS), Zacch Adedeji, has described the removal of petrol subsidy as one of the most significant economic decisions taken by the Tinubu administration.

Adedeji spoke during an interview on Channels Television’s Sunday Politics, where he said the subsidy regime placed significant pressure on government finances and made economic reforms more difficult to implement.

He linked some of the country’s recent economic improvements to the removal of the subsidy, which he said had become financially unsustainable.

Adedeji said Tinubu inherited an economy burdened by challenges in the oil sector, a weak revenue base and the high cost of maintaining petrol subsidies.

He said the government subsequently introduced a series of reforms aimed at restructuring the economy and improving revenue generation.

The NRS chairman also challenged prospective presidential candidates ahead of the 2027 election to present alternative solutions to the government’s economic policies.

He called on the administration’s critics to explain how they would approach major reforms such as subsidy removal and the unification of foreign exchange rates if elected.

Adedeji further argued that maintaining the subsidy could have placed an even greater strain on public finances, particularly amid fluctuations in global oil prices and international economic pressures.

He estimated that continued subsidy payments could have cost Nigeria as much as ₦53 trillion, while the naira could have weakened significantly against the US dollar.

President Tinubu announced the removal of petrol subsidy during his inaugural address on May 29, 2023, marking one of the first major economic decisions of his administration.

The policy immediately led to a sharp increase in petrol prices and contributed to higher transportation, food and production costs across the country.

The removal has, however, also increased government revenues and boosted funds shared among the federal, state and local governments through the Federation Account.

Despite these gains, the reform remains controversial, with households and businesses continuing to face pressure from elevated living costs and higher operating expenses.

Adedeji maintained that the reforms should be assessed within the broader objective of creating a more sustainable economy and reducing Nigeria’s dependence on government-funded petrol subsidies.