Central Bank of Nigeria Governor, Olayemi Cardoso, recently revealed that the federal government spent N6.2 trillion on foreign exchange (FX) subsidies in 2022, compared to N4.5 trillion on fuel subsidies.
He made these remarks during the 59th annual Bankers Dinner of the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos.
Cardoso emphasized that FX subsidy losses have been a more significant issue for the country’s revenue than fuel subsidies. He pointed out that the potential revenue lost due to a less reflective FX regime in 2022 was approximately N6.2 trillion, compared to N4.5 trillion from fuel subsidies.
He also mentioned the government’s decision in June 2023 to float the Naira and remove fuel subsidies, which had a lag impact on Nigeria’s economy. Inflation rose to 33.88 percent, and the exchange rate reached N1672.69 per dollar, compared to 22.41 percent inflation and N463 per dollar between May and June 2023.
Cardoso’s statement highlights the significant financial burden of FX subsidies and the economic challenges faced by Nigeria following the policy changes.
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