The Federal Government has explained that severe foreign exchange shortages, declining crude oil earnings, and expensive subsidy policies were the reasons it printed over N30 trillion three years ago. Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said Nigeria struggled to meet its foreign exchange obligations, leaving businesses, individuals, and international airlines unable to access or repatriate funds.
Oyedele Speaks at ICAN Conference in Abuja
Oyedele made the disclosure on Tuesday at the 56th Annual Accountants’ Conference of the Institute of Chartered Accountants of Nigeria (ICAN) in Abuja. He explained that the foreign exchange crisis made it difficult for Nigerians to pay for digital services with bank cards, affecting young people who relied on online platforms to earn a living.
Manufacturers also faced serious challenges as foreign suppliers lost confidence in letters of credit issued by Nigerian banks. Businesses that managed to secure dollars were forced to pay substantial premiums to obtain the currency.
“Only the highly connected got dollars and they ran three pits and everybody bought at a premium. Some companies were closing down,” the minister said.
Dollar Shortages Crippled Businesses and Airlines
International airlines operating in Nigeria were also affected, as they struggled to repatriate ticket sales and other earnings from the country. According to Oyedele, the situation placed additional pressure on businesses and disrupted economic activities, as access to foreign currency became increasingly difficult.
The minister’s remarks highlighted the relationship between crude oil earnings and Nigeria's foreign exchange supply, given the country's dependence on oil exports for a significant portion of its dollar revenue.
Subsidy Policies and Crude Oil Shortages Worsened Crisis
The finance minister also blamed the country's subsidy arrangements, arguing that the system had become unsustainable and was putting additional pressure on government finances.
“We did subsidy to the extent that we had subsidised government money. We started to see fusion production of products,” he said.
Oyedele further identified declining crude oil availability as another major factor behind the foreign exchange crisis. He explained that much of Nigeria's crude oil had already been committed, leaving the government with less than 100,000 barrels per day before President Bola Tinubu intervened.
“You can blame anyone that you like but the reality is we do not have crude. You cannot give what you don’t have. So we ran out of dollars,” he said.
FG Links N30 Trillion Printing to Financial Pressures
Oyedele said the combination of foreign exchange shortages, dwindling crude oil earnings, and costly subsidy arrangements contributed to the decision to print more than N30 trillion three years ago. The government was under pressure to meet its financial obligations and sustain economic activities despite limited access to foreign currency and declining oil-related revenue.
His comments have renewed attention on Nigeria's previous fiscal and monetary decisions, particularly the use of monetary financing to address government funding challenges. The development also underscores the economic pressures that can arise when government spending obligations exceed available revenue and foreign exchange inflows, raising questions about the long-term implications of such financing measures for the economy.
