Nigeria's Finance Minister Warns of Naira Crash Risks

Taiwo Oyedele, Nigeria's minister of finance and coordinating minister, cautioned that restoring petrol subsidies could lead to the naira depreciating to as low as N4,000 to the dollar. He made these remarks during a press briefing after the International Monetary Fund and World Bank annual meetings in Bangkok, Thailand, on October 19.

Oyedele stated that foreign and local investors would react to any indication of a policy reversal before a formal announcement, potentially leading to capital flight and increased demand for foreign exchange. This demand could weaken the naira further, raising the cost of imports and exacerbating inflation, which has already been impacted since the subsidy removal in May 2023.

He clarified that the figures of N3,000, N3,500, or N4,000 per dollar were warnings of possible scenarios, not forecasts. Oyedele also refuted claims that temporary discounts by the Nigerian National Petroleum Company Limited were equivalent to reinstating government-funded subsidies, asserting they were commercial decisions without direct costs to the government budget.