MARKET NEWS

Nigeria's Finance Minister Taiwo Oyedele said savings from the removal of fuel subsidies and foreign-exchange market reforms have largely been absorbed by higher debt-servicing costs and increased government spending.

He said the reforms, introduced in 2023 by President Bola Tinubu, eliminated subsidies that had cost about 5% of GDP but also led to higher borrowing costs, with interest rates rising to around 24% from about 8% before the reforms.

Oyedele added that government spending increased after the minimum wage was raised to 70,000 naira per month and through expanded funding for an education loan programme serving more than 1.5 million students.

He rejected a recent IMF assessment that millions of Nigerians remain in poverty despite the reforms, arguing that short-term declines in real incomes were unavoidable following subsidy removal. The government will instead monitor progress using multidimensional poverty, real per-capita income growth and income inequality, rather than GDP growth alone.

Exchange rate: US$1 = 1,363.70 naira.

Reporting by Camillus Eboh; Writing by Elisha Bala-Gbogbo; Editing by Elaine Hardcastle.