Nigeria rules out return to fuel subsidies and multiple exchange rates

Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has reaffirmed that the government will not restore fuel subsidies or return to a multiple foreign exchange rate system. Speaking on the sidelines of the IMF and World Bank annual meetings in Bangkok, Oyedele addressed concerns from international investors and rating agencies regarding the country's economic direction ahead of the 2027 elections.

Oyedele clarified that a recent 30-day retail margin discount implemented by the Nigerian National Petroleum Company Limited (NNPC) is a temporary commercial measure intended to support citizens, rather than a public-funded subsidy. He argued that reversing current reforms would undermine economic stability and could trigger investor flight.

The International Monetary Fund (IMF) has supported the move toward targeted assistance, advising Nigeria to prioritize financial aid for vulnerable households instead of broad-based subsidies. The IMF warned that universal fuel subsidies could strain public finances, noting that interest payments on debt are projected to consume a significant portion of federal revenue.

Despite the cost-of-living crisis and rising energy prices, the government reported that the economy grew by 4.4 percent in the second quarter of 2026, with foreign reserves exceeding $35 billion.