{"id":8350,"date":"2026-08-15T11:00:13","date_gmt":"2026-08-15T11:00:13","guid":{"rendered":"https:\/\/stakebridgeirpr.com\/media\/?p=8350"},"modified":"2026-08-15T11:00:13","modified_gmt":"2026-08-15T11:00:13","slug":"adedeji-defends-subsidy-removal-cites-n53tn-fiscal-risk","status":"publish","type":"post","link":"https:\/\/stakebridgeirpr.com\/media\/adedeji-defends-subsidy-removal-cites-n53tn-fiscal-risk\/","title":{"rendered":"Adedeji Defends Subsidy Removal, Cites N53tn Fiscal Risk"},"content":{"rendered":"

By Jennete Ugo Anya<\/strong><\/p>\n

 <\/p>\n

The Chairman of the Nigeria Revenue Service (NRS), Dr. Zacch Adedeji, has argued that President Bola Tinubu\u2019s removal of the petrol subsidy in May 2023 prevented a potential N53 trillion fiscal burden under current global conditions. Speaking to Channels Television recently, Adedeji said that retaining the subsidy could also have pushed the naira towards N3,500 per US dollar, as government continued absorbing the gap between market costs and regulated petrol prices.<\/p>\n

DECISION HIGHLIGHT<\/strong><\/p>\n

Adedeji\u2019s argument reframes subsidy removal primarily as a fiscal-risk intervention, with the claimed N53 trillion exposure illustrating the potential cost of maintaining price support during periods of high oil-market and geopolitical volatility.<\/p>\n

DECISION MEMO <\/strong><\/p>\n

The core of Adedeji\u2019s case is that subsidy expenditure represented a structural fiscal liability rather than a conventional government benefit. He argued that government was effectively financing consumption by borrowing to sell petrol below its underlying cost.<\/p>\n

\u201cSubsidy is not an income. It is like you are using your borrowing money to buy a product and that product is 10 naira, and you are selling it at three naira,\u201d he said.<\/p>\n

The N53 trillion figure is presented as a counterfactual estimate of what the subsidy could have cost under the current global environment, rather than a recorded fiscal saving. Its significance therefore lies in the scale of the potential liability and the fiscal exposure the government avoided by removing the subsidy.<\/p>\n

Adedeji said: \u201cThe subsidy today would have been N53 trillion if Mr President had not removed it, given what is happening in Iran, given what is happening globally.\u201d He added: \u201cWith the ripple effects of that, the exchange rate today would have been around N3,500 if that had not been done.\u201d<\/p>\n

The argument establishes a transmission mechanism: higher subsidy costs would increase government financing requirements, potentially intensifying pressure on the naira and worsening the fiscal position. Whether the projected exchange-rate outcome would have materialised is, however, inherently uncertain because it depends on multiple fiscal, monetary and external variables.<\/p>\n

The reform’s immediate costs are less contested. Subsidy removal sharply increased petrol prices and contributed to higher transport and household expenses. The policy trade-off is therefore between removing a potentially large and volatile fiscal obligation and transferring more of the market-adjustment burden to consumers.<\/p>\n

Adedeji described subsidy removal as \u201cthe best thing to have happened to this nation\u201d and called the subsidy \u201cevil\u201d because of its long-term fiscal implications. He also said: \u201cWhat the President deserves now is support and commendation for being a statesman and not a politician.\u201d<\/p>\n

Challenging critics of the reform, he asked: \u201cAnybody who says he is coming, just ask them, \u2018What will you do differently?\u2019 It is not just saying buffer. Buffer as what?\u201d<\/p>\n

On poverty and taxation, Adedeji said: \u201cWe are not here to tax poverty; we are here to tax prosperity.\u201d He argued that expanding economic activity and the tax base, alongside the responsibilities of state governments, would be central to improving prosperity.<\/p>\n

The policy assessment therefore rests on what government does with the fiscal space created by subsidy removal. Eliminating the liability can improve fiscal sustainability, but its broader economic justification ultimately depends on whether resources are redirected towards productive investment, social protection and conditions that support household incomes.<\/p>\n

DATA BOX<\/strong><\/p>\n