The Vice President of Nigeria, Kashim Shettima, explained that President Bola Tinubu decided to remove petrol subsidy because Nigeria’s economy was in poor shape, with a high debt service-to-revenue ratio of 111.8%. This means that for every ₦100,000 earned, Nigeria had to pay ₦111,800 to debtors, leaving little for other important things.
Shettima said Tinubu made this tough decision to save the economy from collapsing. Before Tinubu became president, Nigeria was spending more money on paying debts than it was earning. This was not sustainable and could have led to serious problems for the country.
The government’s data shows that in 2022, Nigeria spent ₦5.65 trillion on debt servicing but only earned about ₦5 trillion. This was the highest debt service-to-revenue ratio in recent years. In 2023, the government planned to spend even more on debt servicing.
Shettima assured Nigerians that despite the challenges, the economy will get better. The government is working on initiatives in different sectors like oil and gas, creative arts, housing, and digital sectors to improve the economy.
President Tinubu removed fuel subsidy in May 2023, which led to an increase in fuel prices. This affected the cost of living and businesses, but the government says the money saved from subsidy removal will be used for health and education sectors. However, many Nigerians are still struggling with high prices and unemployment.
