Nigeria lost N13trn to FX subsidy in 3 yrs – World Bank

The World Bank has revealed that the Nigerian government incurred a loss of N13.2 trillion to foreign exchange (FX) subsidy in the last three years.

The FX policy has helped in keeping the naira at a lower rate over the years.

The Bola Tinubu-led government had floated the local currency by quashing the subsidy regime in foreign exchange allocation.

This has been responsible for the sharp decline in the value of the naira exchanging now at over N1,600 to one dollar from less than N500 before the Tinubu administration took over.

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In its latest Nigeria Development Update (NDU) report, the World Bank disclosed that the country lost N13.2 trillion as a total FX subsidy between 2021 and 2023.

The breakdown showed that N2 trillion was lost in 2021, N6.2 trillion in 2022 and N5 trillion in 2023.

The Washington-based institution in the report noted that the FX subsidy “benefitted certain groups at the expense of the entire country”.

“Quantifying the fiscal cost, through forgone revenue of multiple exchange rates: Prior to the full FX unification in February 2024, the presence of a parallel FX premium generated enormous fiscal costs, in the form of forgone revenues,” World Bank said.