The World Bank has reported that the Nigerian government lost N13.2 trillion to foreign exchange (FX) subsidies over the past three years,Daily Trust reports.
This FX policy had helped maintain a lower exchange rate for the naira for several years.
However, the administration of President Bola Tinubu ended the FX subsidy regime by allowing the naira to float, which led to a sharp depreciation of the currency. The naira now trades at over N1,600 per dollar, compared to less than N500 before Tinubu’s government came into power.
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In its latest Nigeria Development Update (NDU) report, the World Bank revealed that Nigeria incurred a total FX subsidy loss of N13.2 trillion between 2021 and 2023. This includes N2 trillion in 2021, N6.2 trillion in 2022, and N5 trillion in 2023.
The World Bank pointed out that the FX subsidy “benefited certain groups at the expense of the entire country,” and noted that the fiscal cost of the multiple exchange rates, prior to full FX unification in February 2024, was significant due to lost revenue.
