The argument that Nigeria had no alternative whatsoever in 2023 but to simultaneously abolish petrol subsidy and effectively float the naira is clever advocacy, but it is not serious economics. It confuses the existence of a fiscal crisis with the proposition that one particular method of treating that crisis was the only possible treatment.
Yes, Nigeria entered 2023 with a deeply distorted fiscal and foreign-exchange system. The petrol subsidy had become expensive, opaque and increasingly unsustainable. NNPCL itself reported subsidy-related obligations of about ₦3.736 trillion by May 31, 2023. The World Bank likewise estimated that the combined PMS and implicit FX subsidies in 2022 cost about 5.2 percent of GDP.
Nobody disputes the diagnosis. The dispute is over the treatment.
And this is where the “radical surgery” analogy collapses.
A surgeon does not merely remove a diseased organ because it is diseased. He considers timing, dosage, sequencing, the patient’s condition, the alternatives available and, most importantly, how to keep the patient alive during and after the operation.
Nigeria’s problem was not simply that subsidy existed. It was that the country had weak production, low refining capacity, poor revenue mobilisation, massive governance leakages, weak social protection, infrastructure deficits and a structurally unproductive economy. Removing a subsidy without first establishing adequate compensatory mechanisms transferred the adjustment almost immediately from government accounts to household budgets.
Even the World Bank, while supporting the broad direction of the reforms, acknowledged that subsidy removal produced an unprecedented tripling of petrol prices in 2023, followed by another roughly 50 percent increase in 2024, while exchange-rate depreciation generated substantial additional price pressures. It specifically warned that the reforms imposed intense short-term pressures on households and firms.
So the question is not: “Was subsidy unsustainable?”
Of course it was.
The question is: Did Nigeria have to remove it abruptly, while simultaneously allowing a massive exchange-rate repricing, without first putting adequate cushions under production, transportation, food prices, wages and social protection?
That is an entirely different question.
*THE FALSE CHOICE BETWEEN SUBSIDY AND COLLAPSE*
The argument creates a false binary: either Nigeria abolished subsidy immediately or the country would collapse.
That is historically and economically indefensible.
There were other possible approaches: phased subsidy reduction; targeted subsidy for mass transportation; subsidised domestic crude supplied transparently to Nigerian refineries; accelerated domestic refining; differential pricing for strategic sectors; targeted cash transfers; public transportation intervention; expenditure rationalisation; aggressive revenue mobilisation; elimination of wasteful tax expenditures; and a sequenced exchange-rate reform.
Indeed, Nigeria ultimately had to revisit the subsidy question itself. The World Bank reported that the subsidy had effectively resurfaced after the naira depreciation and that the government took additional measures in September 2024 to eliminate the implicit subsidy.
That alone demonstrates the weakness of presenting the May 2023 decision as some mathematically inevitable singular solution.
*THE MOST IMPORTANT QUESTION: WHERE DID THE SAVINGS GO?*
This is where defenders of the policy often change the subject.
Suppose subsidy removal released enormous fiscal resources. Fine.
Then Nigerians are entitled to ask:
Where are the measurable improvements corresponding to those savings?
The World Bank’s May 2025 Nigeria Development Update made a particularly important observation: NNPCL began transferring subsidy-related revenue gains to the Federation only in January 2025 and was remitting only about 50 percent of those gains while using the remainder to offset past arrears. The Bank therefore said that resolving remaining arrears and transferring the full benefits of subsidy reform to the Federation was critical.
That is not an argument for restoring the old subsidy regime. It is an argument for accountability for the savings generated by abolishing it.
If Nigerians are told that they must endure extraordinary hardship because the subsidy was bleeding the country, then the government must demonstrate, transparently and verifiably, what replaced the subsidy in the national balance sheet and what Nigerians received in return.
*AND THEN CAME THE NAIRA*
The same problem applies to the exchange rate.
There was unquestionably a serious FX distortion before 2023. Multiple exchange-rate windows, arbitrage opportunities, illiquidity and accumulated obligations were real problems. The CBN itself describes the June 2023 reform as an attempt to unify the market and improve price discovery.
But correcting a distorted exchange-rate regime is not synonymous with abandoning the naira to whatever equilibrium emerges from a weak productive economy.
There is a profound difference between a market-reflective exchange rate and a policy of indiscriminate currency depreciation.
The objective of monetary reform should ultimately be a stable and credible currency supported by production, exports, reserves, investment and productivity—not simply a weaker naira that makes the books look cleaner.
And there is an important correction to the claim that “we have added almost ₦50 trillion into our reserves.”
Foreign reserves are fundamentally measured in foreign currency, not naira. The World Bank reported reserves above $42 billion by September 2025, following substantial improvement from the earlier period. That is a legitimate achievement. But converting dollars into naira at a depreciated exchange rate and describing the resulting naira valuation as “₦50 trillion added to reserves” can create a profoundly misleading impression of actual reserve accumulation.
*THE REFORM CAN BE NECESSARY AND STILL BE BADLY EXECUTED*
This is the intellectual point the argument misses.
One can acknowledge that Tinubu inherited an exceptionally difficult macroeconomic situation without granting his government an economic blank cheque.
The World Bank itself provides the balanced assessment.
It says the reforms helped avert a macro-fiscal crisis and improved fiscal revenues. But it also says that inflation remained high, real incomes were badly damaged and millions more Nigerians were pushed into poverty.
Its later assessment estimated that about 139 million Nigerians were living in poverty in 2025, with the national poverty rate estimated at approximately 61 percent.
That is not evidence that the reforms failed.
But neither is it evidence that every element of the reforms was optimally designed.
*THE REAL TEST IS NOT WHETHER THE SURGERY STOPPED THE BLEEDING*
The real test is whether the patient gets well.
A government cannot indefinitely say:
“We inherited a dying patient, therefore every consequence of our treatment is unavoidable.”
That is not economic accountability.
The question for 2027 should therefore not be whether subsidy should simply be restored exactly as it existed before May 2023. A serious candidate should explain what a smarter subsidy architecture would look like.
That could mean no blanket subsidy, but targeted support for public transportation. It could mean domestic crude pricing arrangements that make Nigerian refining competitive without creating an opaque fiscal burden. It could mean transparent accounting of every naira saved from subsidy removal. It could mean a strategic reserve mechanism to prevent brutal price shocks. It could mean stronger social protection and productivity-enhancing public expenditure.
In other words, reform does not mean refusing to rethink policy.
Indeed, the government’s own subsequent adjustments demonstrate that economic policy is not theology.
The argument that anyone proposing a review of subsidy policy is merely a populist or economically ignorant politician is therefore intellectually lazy.
The serious question is not “subsidy or no subsidy?”
It is:
What pricing system maximises national welfare, protects the poor, supports domestic production, strengthens refining, preserves fiscal sustainability and prevents government from quietly transferring the entire burden of adjustment onto citizens?
That is precisely the debate Nigeria deserves.
And if Atiku Abubakar proposes a rethink, the proper response is not to call it “voodoo economics.”
Challenge the numbers. Challenge the assumptions. Challenge the alternative policy. Show Nigerians why it will not work.
But do not pretend that because Nigeria had a crisis in 2023, there was only one conceivable economic prescription.
That is not economics.
That is political theology disguised as economic inevitability.
Nigeria needed reform. What Nigerians are entitled to debate is whether they needed THIS reform, implemented THIS way, at THIS speed, with THIS distribution of its costs—and whether the enormous sacrifices imposed on citizens are now producing an equally enormous improvement in their lives.
That is the real test of economic leadership.
*@Justin Adebayo*
