Business
‘More expensive than subsidy?’ — Is FG’s N5,000 transport grant dead on arrival?

Zainab Ahmed, minister of finance, budget, and national planning, said on Tuesday that the federal government would remove fuel subsidy by 2022 and replace it with a N5,000 grant for the poorest Nigerians. According to her, about tens of millions Nigerians would benefit from the transport grant.
Following the revelation, Nigerians online and offline have weighed in on the policy, raising quite a number of reservations about the policy, which is billed to take off sometime between February to June 2022.
While some say the policy is inevitable, following the fiscal condition of the Nigerian states, others differ, emphasising that Nigeria is an oil-producing country and should not have to pay so much for petrol.
TheCable on Wednesday reported that Nigeria had the third-lowest petrol pump price in Africa, after Angola and Algeria. This position strengthens the argument for keeping oil subsidies — if other oil-producing states are doing it, Nigeria can keep subsidies too.
On the flip side, some Nigerians believe the removal of subsidies is long overdue. This school of thought claims that Nigeria is at least 10 years late to the party. They see subsidies as unsustainable, inefficient, and responsible for the lack of competition in the oil sector.
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However, a large chunk of both schools of thought does not entirely believe in the idea of giving N5,000 transport grants to the poorest Nigerians. Some say the grant will be more expensive than the existing fuel subsidy and would have an even worse impact on state finances.

Zainab Ahmed taking questions at NDU launch event
TheCable has reviewed all we know about this policy to draw informed conclusions on the subsidy removal and replacement plan.
You may have seen claims online suggesting that N5,000 for 40 million Nigerians monthly, would amount to N2.4 trillion, which is more than the existing subsidy payments of about N1.8 trillion per year. Mathematically, this is correct. But according to what we know about the policy, this is not exactly the case.
Speaking at the launch of the Nigeria Development Update (NDU) hosted by the World Bank, the minister of finance, said the number of beneficiaries would vary between 20 million and 40 million.
During her opening speech, she said: “Ahead of the target date of mid-2022 for the complete elimination of fuel subsidies, we are working with our partners on measures to cushion potential negative impact of the removal of the subsidies on the most vulnerable at the bottom 40% of the population.
“One of such measures would be to institute a monthly transport subsidy in the form of cash transfer of N5,000 to between 30 – 40 million deserving Nigerians.”
For 30 million Nigerians, the cost of maintaining this grant per year will be N1.8 trillion, which is also as bad as the subsidy payment itself. Going by what the minister initially said, the cost of the grants is worse. This drives the argument for keeping subsidies.
However, the minister also said during the panel discussion that the grant may not get to all 40 million Nigerians, suggesting that the final numbers will be dependent on available resources. This means a lot less than N1 trillion may eventually be spent on delivering the policy.
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TIME: FEBRUARY OR JUNE 2022?
Another challenge with the project is the timeline; questions abound on when exactly this project would kick-off. According to the Petroleum Industry Act, subsidies should be removed by February 2022. But according to the 2022 budget, subsidies will be paid till June, 2022.
Two contradicting pieces of legislation? Not exactly. When the PIB was signed by President Muhammadu Buhari, the president set up an implementation committee to execute PIA within the space of one year.
The committee, in line with the ministry of finance, budget and national planning, made room for subsidies till June 2022, but the removal could be as early as February to save the government some subsidy funds.
Will December, January, February be enough time to convince Nigerians on subsidy removal? Time will tell.

The beneficiaries would be identified as they were with other SIPs under the Buhari government, but payments will not be made physically like this
HOW WOULD THE 40M NIGERIANS BE SELECTED?
Yes, this is a recurrent question. But according to the minister, the selection process will build on the existing conditional cash transfer register used by the office of the vice-president in administering payments to poor and vulnerable Nigerians in the past.
The minister said the government will be working with state governments and non-governmental organisation (NGO) to ensure that the people who get the grant are the ones who actually get the funds.
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DEAD ON ARRIVAL?
The World Bank recommended that Nigeria “implement a large-scale (covering 25% to 50% of the population) and time-bound targeted cash-transfer program to mitigate impacts of high inflation and the PMS subsidy removal.”
It also asked the government to “redirect savings from PMS subsidy to finance primary health, basic education, and rural connectivity projects” with the country.
The bank estimates that subsidy savings could be as high as N3 trillion per year. If that is the reality, then Nigeria can go ahead with the cash transfers, and still have some money to finance primary health, basic education, and rural connectivity projects.
However, going by 2019 figures, subsidy savings will be less than N2 trillion, while N5,000 to 40 million Nigerians will amount to N2.4 trillion. At that rate, there will be no savings for other projects recommended by the bank.
Dead on arrival? A lot will depend on the final implementation plans.
TheCable
Business
How to use $23bn forex reserves to stablise exchange rate, by Uwaleke

How to use $23bn forex reserves to stablise exchange rate, by Uwaleke
A financial expert, Prof. Uche Uwaleke has said the accretion of Foreign Exchange Reserves (NRER) at 23.11 billion dollars to Nigeria’s external reserves puts the Central Bank of Nigeria (CBN) in a stronger position to defend the value of the naira.
“The CBN can leverage rising external reserves to intervene in the forex market whenever it becomes necessary to stabilise the exchange rate,” Uwaleke said while arguing that the current size of the NER will positively impact on the value of the Naira.
Uwaleke, a Professor of Capital Market at the Nasarawa State University, Keffi, is also the President of the Capital Market Academics of Nigeria, however, raised concerns that the increase in the nation’s foreign reserves had been largely on account of temporary FX inflows such as Foreign Portfolio Investments (FPIs) and foreign loans.
He said that they represented unsustainable sources of growing external reserves.
“Impatient capital such as FPIs carry a lot of risks and have the potential of destabilising the economy whenever they leave the country.
“Against this backdrop, the government should pay more attention to diversifying the export base of the economy, especially via agriculture and solid minerals.
“The government should also create the enabling environment that attracts sustainable Foreign Direct Investments (FDIs) ,” he said.
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The CBN recently revealed that the NFER stood at 23.11 billion dollars at the end of 2024, their highest level in three years.
The apex bank said that the development signalled a major improvement in the country’s external financial position.
It said that the NFER, which adjusts gross reserves to account for near-term liabilities such as currency swaps and forward contracts, stood at 3.99 billion dollars at the end of 2023.
According to the CBN Governor, Yemi Cardoso, the improved position was due to substantial reduction in short-term foreign exchange liabilities, notably swaps and forward obligations.
Cardoso cited measures aimed at boosting forex market confidence and reserves, alongside increased non-oil foreign exchange inflows.
“This improvement in our net reserves is not accidental; it is the outcome of deliberate policy choices aimed at rebuilding confidence, reducing vulnerabilities, and laying the foundation for long-term stability.
“We remain focused on sustaining this progress through transparency, discipline, and market-driven reforms,” Cardoso said.
He said that Gross external reserves also climbed to 40.19 billion dollars at the end of 2024, up from 33.22 billion dollars the previous year.
“Reserves declined in the first quarter of 2025 due to seasonal factors and foreign debt interest payments, the CBN anticipates a steady uptick in reserves throughout the second quarter,” Cardoso said.
How to use $23bn forex reserves to stablise exchange rate, by Uwaleke
(NAN)
Business
Fuel prices to fall as global cost of crude drops

Fuel prices to fall as global cost of crude drops
Nigerians are expected to pay less for Premium Motor Spirit, also known as petrol, as the price of Brent dropped to $65 per barrel from $69.90 per barrel in the global market.
The price of Brent is used globally to benchmark the prices of other crudes. major feedstocks – and by extension petroleum products prices.
The development was partly fueled by the US President Donald Trump’s announcement of sweeping new tariffs.
This was reportedly fueled by the decision of the Organisation of Oil Producing Countries and its allies to increase oil output by 410,000 barrels per day starting May 2025 far above the 135,000 barrels originally planned.
A report by Vanguard stated that the depot prices of Mainland, A.Y.M and Ever have dropped to N918 per litre from N920 and N919 from N920 per litre, respectively.
Also, the depot prices of Prudent, Eterna and Soroman have dropped to N912 from N913 per litre, N897 from N900 per litre and N915 from N916 per litre, respectively.
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According to petroleumprice.ng, oil marketers would likely adjust their pump prices downwards as they get new supplies this week, if the current market condition persists.
The Vanguard report quoted the President of Petroleum Products Retail Outlets Owners Association of Nigeria, PETROAN, Billy Gillis-Harry, expressed optimism that the development would culminate in low costs of fares, goods and services if the fundamentals persist in the market.
Business
CBN injects $197.71m to boost FX as Trump trade tariff spreads

CBN injects $197.71m to boost FX as Trump trade tariff spreads
The Central Bank of Nigeria (CBN) has supplied $197.71 million to the foreign exchange market through sales to authorised dealers.
The apex bank’s director of financial markets department, Omolara Duke, disclosed this in a statement on Saturday in Abuja.
She noted that the intervention aligned with the apex bank’s ongoing commitment to ensuring adequate liquidity and supporting orderly market functioning.
According to Ms Duke, the move reflects the CBN’s broader objective of fostering a stable, transparent, and efficient foreign exchange market.
She said the decision was largely influenced by recent movements in the FX market, driven by the announcement of new U.S. tariffs and declining crude oil prices.
“The CBN has observed recent fluctuations in the foreign exchange market between April 3 and April 4.
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“These are reflective of broader global macroeconomic shifts currently impacting several emerging markets and developing economies.
“These developments stem from the recent announcement by the United States government of new import tariffs on goods from several economies, triggering a period of adjustment across global markets,” she said.
Ms Duke said crude oil prices had dropped by over 12 per cent, falling to approximately $$65.50 per barrel, introducing new challenges for oil-exporting nations like Nigeria.
She said the CBN would continue monitoring global and domestic market conditions.
Ms Duke expressed confidence in the resilience of Nigeria’s foreign exchange framework, which is designed to adjust in line with evolving economic fundamentals.
“All authorised dealers are reminded to strictly adhere to the principles outlined in the Nigerian FX Market Code and uphold the highest standards in their dealings with clients and market counterparties,” she said.
CBN injects $197.71m to boost FX as Trump trade tariff spreads
(NAN)
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