The World Bank reports that Nigeria lost N13.2 trillion in revenue due to foreign exchange (FX) subsidies between 2021 and 2023.
The losses resulted from the government’s policy of maintaining an official naira exchange rate while higher rates prevailed in the parallel market.
According to the report, the government lost N2 trillion in 2021, N6.2 trillion in 2022, and N5 trillion in 2023. It emphasized that the dual exchange rate system reduced government revenue from oil, import duties, value-added tax, and company income tax.
“Prior to the full FX unification in February 2024, the presence of a parallel FX premium generated enormous fiscal costs in the form of forgone revenues,” the report explained.
The World Bank urged the government to maintain a unified exchange rate, stating that doing so would restore fiscal stability and eliminate distortions that favored some groups over others.
—Ezinwanne Onwuka reports for TruthNigeria from Abuja.
