On the 29th of May 2023, freshly sworn-in President Bola Ahmed Tinubu stood before the nation at Eagle Square, Abuja, and delivered what will surely be studied in future generations as the most consequential two-word sentence in Nigerian economic history: “Subsidy is gone.”
He said it with the quiet confidence of a man who had already arranged the removal company, rented the skip, and billed his predecessor for the labour. There was no fanfare, no white paper, no televised address to a worried nation with charts and reassurances. Just two words and a country of 220 million people who went to bed paying N198 per litre and woke up, functionally, in a different country.
What the Nigerian public was not told, what it was never going to be told — is that this was not a decision. It was a delivery. The decision had been made in Washington, pencilled into reports in Geneva, structured into loan conditionalities, and embedded in the commercial architecture of entities positioned to inherit the market the moment the subsidy disappeared. Tinubu did not abolish the fuel subsidy. He accepted a receipt.
Act One: The Script from Washington
Every great production needs a script. Nigeria’s was filed under the heading “Article IV Consultation.”
In February 2023, the IMF Executive Board, concluding its 2022 Article IV Consultation with Nigeria, formally urged the authorities to deliver on their commitment to remove fuel subsidies by mid-2023 and to increase well-targeted social spending. Not “when the economy is ready.” Not “subject to social impact assessment.” By mid-2023. The incoming President would be sworn in on the 29th of May. The IMF’s deadline was June. One is free to call this a coincidence. One is, however, also free to call the Atlantic Ocean a puddle.
The World Bank had been performing the same aria for years. World Bank President David Malpass had publicly called on Nigeria to phase out its costly, regressive fuel subsidy and rationalise preferential trade restrictions and tax exemptions. “Regressive” is the operative word, a subsidy which, whatever its inefficiencies, kept fuel in the tanks of okada riders, market women, small generators, and commercial bus drivers was deemed structurally unacceptable. The subsidy that kept a Nigerian mechanic in Oshodi from spending half his income on transportation was “regressive.” The billions in energy relief packages distributed by European governments to their citizens following the 2022 Russia-Ukraine energy shock were, in the vocabulary of the same institutions, “temporary stabilisation measures” and “household support schemes.” European governments used a variety of price suppression measures and cuts in energy taxes to limit the burden of the price surge on their households, and the IMF’s advice to Europe was not “remove it immediately.” It was “make it targeted.” For Nigeria, the instruction was simpler: abolish it. The moral framework adjusts, it seems, depending on which hemisphere one is standing in.
Act Two: The Arithmetic of Captivity
To understand why Nigeria complied, one must understand the fiscal vice in which the country was already trapped, a vice the same institutions had spent years tightening.
By 2022, Nigeria was spending 96.3 percent of its revenue on debt servicing, deteriorating from 83.2 percent in 2021, according to the World Bank’s Macro Poverty Outlook. Read that again, slowly. Of every one hundred naira earned by the Nigerian state, ninety-six naira went to service debts, principally to international creditors and the domestic bond market. The remaining four naira was expected to run 36 states, a federal capital, a national military, a civil service, a police force, public schools, and a healthcare system serving one of the largest populations on earth. This was not a budget. It was a performance of a budget, staged for the benefit of ratings agencies.
In the 2023 national budget, debt servicing consumed 29 percent of the budget, while the shares allocated to education, health, and infrastructure were 8 percent, 5 percent, and 6 percent respectively. Nigeria was spending more money paying for yesterday than investing in tomorrow, and every naira paying for yesterday was a naira borrowed from a tomorrow already committed to foreign creditors.
The economics of this situation deserve a frank structural diagnosis. Nigeria’s debt crisis did not emerge in a vacuum. It was the product of what development economists call the “resource curse compounded by conditionality” a syndrome in which oil-dependent states are simultaneously encouraged to borrow against future commodity revenues, undermined by commodity price volatility engineered in markets they do not control, and then presented with reform conditions by the very creditors who extended the loans. The debt obligations created the fiscal straitjacket. The fiscal straitjacket made the conditions impossible to resist. The conditions mandated the reform. The reform served commercial interests. The commercial interests had been positioned in advance.
In this environment, the call to end the subsidy was not advice. It was terms. Nigeria had approximately as much freedom to reject the IMF’s directive as a man in a burning building has freedom to reject a ladder. The question is who owned the building, who lit the match, and who was waiting at the bottom of the ladder to charge for the landing.
Act Three: The Strategic Assembly – Follow the Timeline
Let us follow the sequence of events with the discipline of a fraud examiner, because the timing in this story is everything.
September 2021: The Nigerian National Petroleum Corporation is reconstituted as NNPC Limited, a commercial, profit-oriented entity, legally freed from its obligations as a state welfare instrument. The need for the corporation to become profit-generating was a key reason for this transformation. One of the key profit-drainers had been its subsidy payments, recorded as under-recovery in its books. In plain terms: the national oil company was told it could no longer be required to absorb the cost of keeping fuel affordable for Nigerians. First, deprive the subsidy of its operational mechanism. Then, in due course, deprive Nigerians of the subsidy itself.
May 22, 2023: The Dangote Petroleum Refinery, a $20 billion private facility located in Lekki, Lagos, owned by Africa’s wealthiest individual, is formally commissioned. Owned by the Dangote Group, the refinery was officially inaugurated on May 22, 2023. Seven days later, President Tinubu is sworn in and announces that the subsidy is gone. The refinery whose business model required market-rate fuel pricing opened one week before the policy that created market-rate fuel pricing was announced.
One does not assert conspiracy where coincidence may suffice. But coincidence, in economic analysis, is a hypothesis, not a conclusion. And the hypothesis that the largest private refinery on the African continent happened to be commissioned seven days before the subsidy that had suppressed its commercial viability for decades was abolished, and that this reflected no prior coordination whatsoever, is a hypothesis that demands considerably more evidence than its proponents have supplied.
By the evening of May 29, 2023, petrol prices had risen to N500 per litre, up from around N198. A 152 percent overnight price increase. The refinery, which sells petroleum products at international market benchmarks, was commercially viable from Day One of the new dispensation. The millions of Nigerians who had depended on the subsidy were commercially inconvenient from Day One. The policy choice between these two outcomes was already, structurally, made. Tinubu merely signed the form.
Act Four: The Economics of Managed Suffering
Now we arrive at what the technocrats call “impact mitigation” and what the rest of us call the art of announcing catastrophe while distributing biscuits.
The Nigerian government obtained, from the World Bank, an $800 million relief package. The money, intended to be added to the pool of funds available for the conditional cash transfer programme, was expected to be distributed to 10 million households as cash. $800 million, divided across 10 million households, in an economy of 220 million people: this is approximately $80 per household, in a country where food inflation on a year-on-year basis reached 30.64 percent in September 2023 alone, with states like Kogi recording food inflation of 39.37 percent, and Rivers and Lagos exceeding 35 percent.
To contextualise: $80 per household, delivered once, in the face of a 30 percent food inflation rate sustained across an entire year. This was not cushioning. This was theatre, specifically, the theatre of institutional responsibility, in which the World Bank could record on its books that “compensatory measures were provided” while the data recorded something rather different.
The data recorded this: rising inflation and weak earnings pushed 10 million Nigerians into poverty in 2023 alone, according to the World Bank’s own Macro Poverty Outlook for Nigeria, published in April 2024. Since 2018/19, an additional 42 million Nigerians have fallen into poverty, such that more than half of all Nigerians, 54 percent, are estimated to live in poverty in 2024, based on World Bank projections. Poverty levels steadily climbed from 56 percent in 2023 to 61 percent in 2024, before peaking at 63 percent in 2025.
The institution that prescribed the removal recorded the human cost of the removal in the footnotes of subsequent reports and described it as “transitional.” The institution that designed the palliatives acknowledged their insufficiency while continuing to recommend the same structural framework. And the people, the market traders, the keke drivers, the micro-businesses running on generators that now consumed a third of daily revenue in fuel costs, were advised that things would improve in the medium term. The medium term, for a woman in Onitsha who cannot afford to restock her market stall, is a theological concept.
The deeper structural damage is transmissional. With fuel underpinning 90 percent of Nigeria’s transport and logistics, the jump in pump prices from approximately ₦185 to ₦617 spiked transport costs by 234 percent, amplifying inflation to 34.2 percent, with food inflation exceeding 40 percent. This is not merely a price increase. It is a systemic repricing of the entire economy, of every good moved by truck, every farm input transported from depot to field, every child’s school lunch whose ingredients passed through a supply chain powered by diesel. The fuel subsidy, for all its documented inefficiencies, had functioned as a systemic price stabiliser embedded across every sector of productive activity. Its removal did not merely raise petrol prices. It raised the price of everything petrol touches, which, in an economy dependent on imported energy and road-based logistics, is approximately everything.
Act Five: The Double Standard in Plain Sight
There is a moment in every colonial-era economic arrangement when the contradiction becomes too visible to ignore. We have reached it.
In 2022, as Russian gas supply to Europe contracted, European governments deployed hundreds of billions of euros in energy price caps, household fuel subsidies, utility bill relief, and direct cash payments to businesses and households. European governments used a variety of price suppression measures and cuts in energy taxes to limit the burden of the price surge on households. The IMF’s response to this was not “remove these subsidies immediately.” It was a carefully worded advisory to ensure the measures were “temporary and targeted” with full appreciation for the “enormous pressure” on European politicians to protect their citizens. The vocabulary employed: “support mechanisms,” “relief measures,” “stabilisation packages.”
The vocabulary employed for Nigeria’s subsidy, which performed the same function, for people considerably poorer, in an economy with no comparable social security architecture: “costly,” “regressive,” “market-distorting,” and “fiscally unsustainable.”
The IMF is not a malicious institution. It is, however, an institution that reflects the interests and assumptions of its principal shareholders, principally the United States and Western European powers, whose economies are structured to benefit from open, deregulated developing-world commodity markets. A Nigeria with cheap, subsidised fuel is a Nigeria that is less reliant on international commodity markets for its domestic consumption. A Nigeria with market-priced fuel is a Nigeria fully integrated into, and therefore fully exposed to, those markets. Integration, for global capital, is not a neutral value. It is a preferred structural condition.
Act Six: What the Numbers Say About Who Won
In October 2024, petrol prices reached 1,030 naira per litre in Lagos and Abuja, compared to around 195 naira previously, a price hike that worsened economic challenges for Nigerians already facing inflation exceeding 30 percent in 2024.
The Dangote Refinery is now operating at 661,000 barrels per day, above its 650,000 bpd installed capacity. The founder projects EBITDA growth from approximately $3 billion to over $30 billion by the end of the decade, with an anticipated IPO in Q2 2026.
The refinery is exporting to Ghana, Cameroon, Togo, Tanzania, and the United States. It is by any metric a commercial triumph. The question this article asks, and insists on asking, is whether the conditions for that triumph were created by policy choice in the interests of the Nigerian public, or by policy implementation in the interests of a pre-positioned commercial architecture.
The answer is not binary. Nigeria’s state refineries were genuinely dysfunctional. The subsidy regime was genuinely prone to corruption and leakage, estimates suggested the majority of its benefits accrued to fuel smugglers, middle-men, and vehicle-owning upper-income households rather than to the working poor for whom it was nominally maintained. These are real problems that demanded real solutions.
But a real solution would have been phased, as Indonesia phased its own fuel price reform, cutting its energy subsidies from 3.4 percent of GDP to 1.1 percent over eighteen months while protecting low-income households. It would have been sequenced, with genuine social protection infrastructure built before, not promised after, the price shock. It would have been honest, acknowledging that the primary beneficiaries of immediate, unphased removal were private refiners and international creditors, not the Nigerian public for whose benefit the fiscal “savings” were rhetorically invoked.
None of these things happened. PricewaterhouseCoopers, in its January 2025 Nigeria Budget and Economic Outlook, warned that inflation combined with inadequate social protection could push up to 13 million more Nigerians into poverty in 2025 alone. The palliatives were, as feared, a messaging exercise dressed in humanitarian language. The systemic purchasing power loss has not been reversed. It has deepened, broadened, and acquired its own structural momentum.
Conclusion: The Honest Account
The removal of Nigeria’s fuel subsidy in May 2023 was not the bold, sovereign act of a new administration cutting through decades of fiscal dysfunction. It was the terminal event in a long-running process by which Nigeria’s fiscal space was compressed to the point that compliance became the only geometry available, and then compliance was dressed in the language of courage.
The IMF called it a “strong start.” The World Bank praised the “structural reform.” The macroeconomic indicators, exchange rate unification, inflation trajectory projections, debt-to-GDP path, moved, in time, in the preferred direction. The GDP continued to register modest growth.
And 42 million additional Nigerians fell below the poverty line. And food inflation reached 40 percent. And a woman in Kano who ran a small pepper trading business found that the transport cost of her goods had tripled, that her customers had less money than before, and that the government’s response to this was to recommend she collect her share of an $800 million disbursement, delivered through a cash transfer programme whose infrastructure did not reliably reach her.
Subsidy is gone, said the President.
He was correct. It was gone before he arrived. It had been scheduled for removal, its successor infrastructure assembled, its beneficiaries positioned, and its epitaph drafted in Washington. What Tinubu provided, on the steps of Eagle Square, was not a decision. It was a ceremony, the official unveiling of an arrangement whose participants had long since shaken hands.
The Nigerian people, as always, were not at that meeting. But they have been paying the bill ever since.
Centre for Nigeria Progress 