Nigeria's economy would have collapsed without fuel subsidy removal

The Leader of the Senate, Opeyemi Bamidele, said Nigeria’s economy would have been in complete shambles if the Bola Tinubu administration had not removed the fuel subsidy.

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Mr Bamidele, who represents Ekiti Central Senatorial District, maintained that removing the subsidy was necessary to stabilise the country’s finances and ensure sustainable governance.

He said these in a statement issued by his Directorate of Media and Public Affairs on Monday.

“Running an economy indeed calls for strategic response. The strategic steps being taken are not something that will yield a positive outcome within 24 hours. If subsidy has not been removed, our economy would have been in shambles or would have been flat on the floor.

“This administration has not been in office for up to two years. So much have been achieved across all strategic sectors, and diverse reforms are ongoing to further deepen the gains of the administration. If fuel subsidy is retained, only God knows what would have happened to this federation,” he said.

The removal of the petrol subsidy and the floating of the naira policy have specifically led Nigeria to witness the worst cost-of-living crisis in decades. Prices of essential goods and services are now more than doubled across the country.

Thousands of Nigerians have protested against the policies and demanded immediate reversal, but nothing has been done.

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Despite the increasing cost of living, the government has remained resolute in its stance. President Tinubu has repeatedly acknowledged the economic difficulties Nigerians face but insisted that subsidy removal was in the country’s best long-term interest.

While the government claims to have removed the subsidy entirely, an investigative report by PREMIUM TIMES revealed that it is still paying an average of ₦501.47 per litre as subsidy in at least eight cities across Nigeria. This pattern is replicated across other states.

But the government continuously denies it.

The role of 9th assembly in subsidy removal

Mr Bamidele maintained that the removal of fuel subsidy was not a sudden decision by the Tinubu administration but a necessary step based on the policy direction already set by the 9th National Assembly.

He explained that the previous legislature had only made budgetary provisions for the subsidy until May 2023, meaning that even if Mr Tinubu had not announced its removal, the policy would have naturally ended.

“I was part of the 9th National Assembly. At that time, we had agreed with the executive arm that the fuel subsidy should be removed because it was no longer in the overriding interest of the country. The Tinubu administration acted based on the policy direction the National Assembly approved before his inauguration on May 29, 2023.

“In the 2023 budget, the National Assembly only made provision for fuel subsidy till May 2023. Whether the subsidy was removed at his inauguration or not, there was no longer funding for the subsidy because we did not make provision for it beyond May 2023.

“He (Tinubu) did not say he was going to remove the fuel subsidy. He simply said that the fuel subsidy was gone simply because the National Assembly only made provision for it till May 2023. Even if he did not say it, the fuel subsidy would have gone in two days after his inauguration,” the senate leader said.

Beneficiaries of fuel subsidies ganged up against Tinubu administration

Mr Bamidele also alleged that economic saboteurs who previously benefited from the subsidy system have been actively working to make governance difficult for the Tinubu administration.

He noted that it was not ordinary Nigerians who were the primary beneficiaries of the subsidy but a powerful cabal that manipulated the system to their advantage.

“I am convinced that the president did the right thing by removing the fuel subsidy, for which the 9th National Assembly made provision till May 2023. But the people that made governance difficult for President Tinubu were those benefiting from fuel subsidies.

“It was not common men and women of this country who were benefiting from the fuel subsidy. It was not. It was members of the cabal who had access to the fuel subsidy. They are the ones taking away this privilege, all in the name and on behalf of the masses. And the masses did not benefit from it,” he stated.

Mr Bamidele argued that while the removal of subsidies led to short-term economic difficulties, the long-term benefits are becoming evident.

How subsidy savings are utilised

The senate leader explained that proceeds from the subsidy removal are now being allocated directly to state governments to improve and stimulate economic growth.

He urged Nigerians to consider these benefits instead of focusing solely on the immediate hardships.

“The proceeds realised from the fuel subsidy are now being allocated directly to the sub-national governments to drive development and boost the domestic economy. These are the points we need to emphasise in our public engagement,” he added.

Stabilising Nigeria’s economy with 2025 Budget

Mr Bamidele assured the 2025 Budget would significantly address the nation’s economic challenges.

He said the budget prioritised capital expenditure rather than recurrent costs, which signals a shift towards long-term development.

“What is the focus of the 2025 budget being passed? Does it address the welfare of the people? Does it prioritise the critical sector of the economy, including education? What is the scale of attention being paid to health and social welfare? What is the percentage of the budget going to agriculture?

“Compared to the previous fiscal years, the federal government is devoting less to recurrent expenditure while more is being devoted to capital expenditure. That is a major shift from what had been in practice since the return to democracy. It means we are spending less on consumables.”

Despite the economic challenges, Mr Bamidele commended the Tinubu administration for its commitment to stabilising the economy, providing jobs, and improving security.

He noted that security conditions are gradually improving and that displaced persons have started returning home and farmers are resuming their agricultural activities.

“While it is not yet Uhuru, the security situation is fast improving across the federation today. Some of the IDPs are gradually relocating to their base. Farmers are too steadily returning to their farms. Altogether, things are improving. I am sure that things will be different very soon,” the senate leader said.