Olayemi Cardoso, the Central Bank of Nigeria’s Governor has made a revelation concerning Federal Government’s subsidy expenses.
Nigeria’s economy faced significant challenges in 2022, with the federal government spending a staggering N6.2 trillion on foreign exchange subsidies, dwarfing the N4.5 trillion spent on fuel subsidies.
This revelation came from the Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, during the 59th annual Bankers Dinner of the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos.
Cardoso emphasized that foreign exchange subsidy losses have been a more significant problem for the country’s revenue than fuel subsidies.
He noted that the potential revenue lost due to a less reflective FX regime in 2022 alone was approximately N6.2 trillion, compared to N4.5 trillion from fuel subsidies.
The CBN governor’s statement highlights the need for reforms in the foreign exchange market.
The Nigerian government’s decision to float the Naira and remove fuel subsidies in June 2023 had a lag impact on the economy, with inflation rising to 33.88 percent and the exchange rate reaching N1672.69 per dollar.
In a bid to address these challenges, the CBN has been working to unify the country’s multiple exchange rates, eliminate market distortions, and restore transparency.
The bank’s efforts have started to yield positive results, with the average daily turnover in the Nigerian Autonomous Foreign Exchange Market increasing by 226 percent in the first half of 2024 compared to the same period in 2023.
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