Subsidy removal stabilising Nigeria’s economy despite hardship — Doro

Minister of Humanitarian Affairs and Poverty Reduction, Mr Bernard Doro

Subsidy removal stabilising Nigeria’s economy despite hardship — Doro

The Federal Government has defended the removal of the fuel subsidy, saying the policy has contributed to greater stability in the Nigerian economy despite the hardship and higher living costs experienced by households.

Minister of Humanitarian Affairs and Poverty Reduction, Bernard Doro, made the claim during an interview on Channels Television’s Politics Today, where he defended the economic reforms introduced by President Bola Tinubu’s administration.

Doro said the reforms should not be assessed solely by their immediate impact on household finances but within the broader objective of correcting longstanding economic imbalances and creating a stronger foundation for sustainable growth.

According to the minister, the government is working to reduce inflation, improve purchasing power and address the economic difficulties facing Nigerians through a combination of macroeconomic reforms and targeted social interventions.

He also rejected claims that seven million Nigerians had fallen into poverty under the Tinubu administration, arguing that Nigeria’s poverty challenge predates the current government and requires sustained interventions to reverse.

Doro acknowledged the scale of poverty in the country but said meaningful poverty reduction could not be achieved overnight.

He cited China’s decades-long poverty-reduction experience as an example of the sustained effort required to achieve significant results.

“It took China 40 years to achieve the scale they achieved, Nigeria can scale up poverty reduction,” Doro said.

The minister said the government’s responsibility was to ensure that improvements in macroeconomic indicators eventually translate into better conditions for ordinary Nigerians.

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He said the administration was therefore combining economic reforms with social protection programmes, including cash transfers, skills development and other initiatives designed to help vulnerable households move towards economic independence.

Doro disclosed that the Federal Government had distributed more than N600 billion in cash transfers to vulnerable Nigerians over the past three years, with the intervention reaching slightly more than 10 million households.

The minister said the government was also strengthening its approach to poverty reduction by tracking beneficiaries and assessing whether interventions were producing lasting improvements in household welfare.

The latest effort includes the Federal Government’s $1 billion Renewed Hope Social Protection Programme, which is designed to provide support to vulnerable Nigerians while helping beneficiaries build more sustainable livelihoods.

One component of the programme, the Household Prosperity and Empowerment Social Protection Project (HOPE-SP), targets about 7.6 million vulnerable households nationwide.

Under the programme, eligible households are expected to receive a one-off N40,000 digital shock-response payment, with beneficiaries selected from the National Social Register and validated through their National Identification Numbers.

The government says the programme is designed to move beyond emergency assistance by linking vulnerable households to interventions that can improve their economic prospects.

Doro said poverty reduction would require more than cash transfers, stressing the importance of skills acquisition, employment, entrepreneurship and economic empowerment.

The minister’s comments come amid continued debate over the consequences of the petrol subsidy removal announced in May 2023.

The policy immediately changed the fuel-pricing system and contributed to significant increases in transportation and living costs. The government has consistently argued that the previous subsidy regime was financially unsustainable and that its removal was necessary to improve public finances and redirect resources towards development.

The administration has also implemented foreign exchange reforms, which initially placed additional pressure on prices and the value of the naira.

Government officials now argue that the combination of subsidy removal and foreign-exchange reforms has helped address structural weaknesses in the economy and created the basis for stronger fiscal management.

Nigeria Revenue Service Chairman Zacch Adedeji recently similarly defended the reforms, saying the government inherited an economy facing significant fiscal and structural challenges, including an unsustainable fuel subsidy regime and distortions in the foreign exchange market.

However, the government’s assessment of economic stability continues to face scrutiny as households contend with food prices, transport costs and reduced purchasing power.

While some economic indicators have improved, many Nigerians continue to feel the effects of the cost-of-living crisis created by the rapid adjustment in fuel prices and other reforms.

This has increased pressure on the government to ensure that reported macroeconomic improvements translate into tangible benefits for households.

Doro said the administration recognised those concerns and would continue combining economic reforms with targeted social protection to cushion vulnerable Nigerians.

He maintained that the objective was not simply to provide temporary relief but to create a system capable of helping people escape poverty permanently.

The minister’s position reflects the Federal Government’s broader argument that the short-term pain associated with subsidy removal was necessary to address deeper economic problems and establish a more sustainable economic framework.

The challenge for the administration now is to demonstrate that the claimed gains in economic stability, government revenue and fiscal management can translate into lower inflation, stronger purchasing power, employment opportunities and measurable reductions in poverty.

For Nigerians, the ultimate measure of the reforms will be whether improvements in economic indicators eventually translate into a noticeable improvement in everyday living standards.