Human rights lawyer and Senior Advocate of Nigeria (SAN), Femi Falana, has questioned the economic gains of President Bola Tinubu’s fuel subsidy removal, arguing that the expected savings have largely been eroded by the depreciation of the naira.
Falana said the government’s claim of freeing up resources by ending petrol subsidy must be examined against the wider economic impact of the policy, particularly the sharp changes in the exchange rate and other measures adopted by the administration.
The legal practitioner made the remarks while speaking on Channels Television’s Sunday Politics.
‘Subsidy had already gone’
Falana also challenged the widely held narrative surrounding the announcement of subsidy removal on May 29, 2023.
According to him, the subsidy arrangement had effectively ended before Tinubu made the declaration because no funds had been provided for petrol subsidy in the 2023 budget.
“At the commercial rate, by the time President Tinubu announced in May that fuel subsidy was gone, it had already gone because not a dime was earmarked for subsidy that year,” Falana said.
He therefore questioned the actual financial benefit Nigeria has derived from the policy since its implementation.
Where are the savings?
The lawyer particularly drew attention to the billions of dollars that, according to him, would have been spent on importing petrol under the former subsidy regime.
Falana asked what had happened to the funds that were expected to become available after subsidy payments were discontinued.
“The $10 billion that would have been spent on the importation of fuel, where is it?” he asked.
His argument centres on whether the savings from subsidy removal have translated into meaningful fiscal gains for the country or whether those gains have been cancelled out by other economic pressures.
Naira depreciation eroded gains, Falana claims
Falana maintained that the depreciation of the naira has significantly reduced the value of whatever savings the government may have achieved.
He argued that the impact of currency devaluation, combined with what he described as the government’s neoliberal economic policies, has effectively consumed the financial gains expected from the subsidy reform.
Did You Miss? New US-Iran Confrontation Erupts At World’s Critical Oil Gateway
“The naira, the exchange rate, has been devalued. So it’s been eaten up by devaluation and other neoliberal policies of the government,” he said.
His comments add to the continuing debate over one of the most consequential economic decisions taken by the Tinubu administration.
While the Federal Government has presented subsidy removal as a necessary step towards reducing fiscal pressure and redirecting public resources, critics have continued to question how the resulting savings have been utilised and whether Nigerians are receiving sufficient benefits from the reform.
For millions of Nigerians, the debate is not merely about government accounting.
It is also about what the end of petrol subsidy has delivered in return for the dramatic increase in the cost of transportation, food and other everyday necessities.
Falana’s position therefore puts a direct question at the centre of the subsidy debate: if the subsidy savings were meant to create more fiscal space for Nigeria, where exactly are the gains today?