Oyedele: Economic volatility from subsidy removal, FX reforms was unavoidable

Minister of Finance, Taiwo Oyedele, has said the economic volatility that followed the removal of petrol subsidies and foreign exchange reforms was inevitable, describing the disruptions as a necessary consequence of correcting long-standing distortions in Nigeria’s economy.

Speaking in an interview with The African Report published on Friday, Oyedele said the government anticipated a period of instability as it moved to dismantle fuel and foreign exchange subsidy regimes that had distorted market operations for years.

According to him, reforms of such magnitude could not be implemented without short-term economic consequences, including rising fuel costs, increased transportation expenses and inflationary pressures.

“To be able to deal with the distortions created by fuel subsidies, foreign exchange subsidies and other market inefficiencies, volatility was unavoidable,” Oyedele said.

He noted that the administration expected fuel prices to rise following subsidy removal, with knock-on effects on logistics, transportation and the general cost of living.

“You remove subsidy, fuel prices go up. Transportation is affected, logistics is affected and inflationary pressure follows. Those were short-term challenges we knew the country would have to face,” he stated.

Oyedele explained that the reforms were designed to address structural weaknesses in the economy and lay the foundation for sustainable long-term growth.