The Federal Government has blamed the worsening poverty situation in Nigeria partly on the removal of fuel subsidy, describing the previous subsidy regime as an unsustainable policy that created a false sense of economic stability.
Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said Nigerians were living under what he called “fiscal illusions” before President Bola Tinubu’s administration introduced its reforms.
Oyedele made the remarks while responding to concerns from the World Bank that poverty levels had increased despite the government’s economic measures. He argued that the assessment did not fully capture the improvements recorded in Nigeria’s per capita income following the reforms.
“You cannot remove subsidy, and people become richer,” Oyedele said, explaining that the policy change was necessary to rebuild the economy.
The minister admitted that the removal of subsidy initially affected citizens’ purchasing power and contributed to rising poverty, but maintained that the long-term benefits would outweigh the short-term challenges.
He said Nigeria recorded significant growth in real per capita income in 2025, with dollar-based income rising by almost 10 per cent, adding that the government intends to maintain the current economic direction rather than return to the previous subsidy system.
According to Oyedele, the reforms represented a necessary reset that would help the country achieve sustainable economic growth and improve living standards over time.