Nigeria to save N3.9tr from FX, fuel reforms – World Bank

Nigeria could save up to N3.9 trillion ($5.10 billion) in 2023 after reforms to its foreign exchange market and the removal of the fuel subsidy.

This was disclosed by World Bank lead economist for Nigeria, Alex Sienaert.

President Bola Tinubu, who is embarking on the country’s biggest reforms in decades to tackle issues including a high debt burden, scrapped the popular but expensive subsidy when he took office last month.

The Central Bank of Nigeria has unified the country’s exchange rates, following Tinubu’s criticism of a currency regime that had hampered Africa’s biggest economy for years.

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World Bank lead economist for Nigeria, Alex Sienaert, said the FX and subsidy reforms “stop Nigeria from going over what you might call the fiscal cliff. They really set the stage for a new and upward trajectory in terms of Nigeria’s development path.”

Nigeria’s economy was expected to grow 3.3% this year and 3.7% next year, he said.

The World Bank and International Monetary Fund had for years called on Nigeria to remove the petrol subsidy, which cost $10 billion last year, and free its exchange rate.

To deepen foreign exchange reforms, Siernaet said Nigeria should remove restrictions on a list of 43 items, including sugar and flour that the central bank says cannot be funded from official dollar sales.