The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has stated that the economic volatility following the removal of petrol subsidy and foreign exchange market reforms was unavoidable. In an interview with The African Report, Oyedele explained that these reforms were essential to address long-standing distortions caused by years of fuel and foreign exchange subsidies.
Necessary Reforms
Oyedele noted that three years ago, the Nigerian economy faced significant distortions, particularly from fuel and FX subsidies. He emphasized that the government anticipated short-term consequences such as increased fuel prices, higher transportation costs, and inflationary pressures. However, he believes the economy has moved past the initial adjustment phase and is now entering a growth-oriented period.
Positive Economic Indicators
The minister pointed to recent signs of improvement, including moderation in inflation, stabilization of the foreign exchange rate, and modest but increasing economic growth. He acknowledged that geopolitical developments have created new pressures but stressed that the government's focus is on translating earlier reforms into tangible economic benefits.
Investments in power, infrastructure, and skills development are critical for sustaining growth, alongside continued business environment reforms. Oyedele also addressed tax compliance, stating that the government aims to enforce compliance through mechanisms rather than relying solely on voluntary participation. He highlighted that large tax evaders, including multinational companies and high-net-worth individuals, are being targeted to improve revenue collection.
The minister reaffirmed the government's commitment to deepening reforms while ensuring that macroeconomic stability benefits businesses and households nationwide.
