The Debt Management Office (DMO) praised President Bola Ahmed Tinubu for his bravery in ending the contentious fuel subsidy, calling the program a waste of the nation’s resources.
At a one-day technical roundtable on the economic strategy for President Bola Ahmed Tinubu’s administration, organized by ActionAid Nigeria, Director-General of DMO Patience Oniha made the commendation.
She claimed that removing subsidies and unifying the currency will greatly improve the economy, notwithstanding some difficulties in implementation.
Oniha stated: “It is essential to recognise that the situation of the economy needed critical and urgent attention to avoid a deterioration in major economic and social indices. Thus, some of the measures that have been taken so far were not only needed but essential to propel Nigeria towards sustainable development.”
Leaders must pursue a development model that generates more employment possibilities and greater income levels in order to advance the policy agenda, she said.
While she acknowledged that the recent government moves have drawn criticism about their timing and necessity, “it is important for us to understand the impact of subsidies and exchange rates on the budget.
“Subsidies are an expenditure item in the budget, thus invariably, they contribute to the budget deficits. On the other hand, naira exchange rates used for the budgets are the official rates, which we all know are much lower than the open market rates, the effect of which is lower revenue.”
“Overall, these two policy stances that were maintained over many years, contributed to persistent budget deficits which were financed by an average of 90 percent through borrowings.”
