Nigeria’s Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, has warned that reversing the removal of fuel subsidy would trigger capital flight and economic damage that could make Indonesia’s recent stock market crash look like “child’s play”.
Oyedele said international and domestic investors would react negatively if the Federal Government announced plans to restore fuel subsidy, potentially triggering a sharp depreciation of the naira and higher fuel prices.
He spoke at a press briefing on the sidelines of the 2026 International Monetary Fund and World Bank annual meetings in Bangkok, Thailand, while responding to questions about balancing the expectations of investors with the needs of Nigerians.
“If, for any reason, Mr. President says we are considering just that, we are considering return of subsidy on fuel, you know this thing that is happening to Indonesia, it will be a child’s play,” he said.
“Because at the end of the day, capital will leave once you say that, because they know what it means.”
The minister pointed to Indonesia’s recent stock market losses as a warning about the potential consequences of policies that undermine investor confidence.
Indonesia’s benchmark Jakarta Composite Index fell by 11.6 per cent on Friday, marking its worst performance in years, after index provider MSCI raised concerns about the country’s market accessibility and threatened to reclassify it as a standalone market.
The Indonesian market was down about 40 per cent for the year, while Nigeria’s stock market had gained 59 per cent over the same period, according to figures cited during the briefing.
Oyedele warned that a reversal of Nigeria’s fuel subsidy policy could prompt investors to withdraw their capital, placing additional pressure on the naira.
“So when capital leaves, your effects will struggle. So Naira crashes. 3,000, 3,500, 4,000. The fuel that they want to subsidise, they will be wishing for 1,400 per litre.”
He added that Nigerians could also move their savings away from the naira and into foreign currencies, compounding the pressure on the economy.
“Even Nigerians, the elites, the middle class, the high net worths, they will move away from Naira, they will start buying dollars. These were things they did before, so we are not making it up. They start moving against Naira.”
Oyedele said the combination of capital outflows and domestic demand for foreign currencies could have severe consequences for ordinary Nigerians.
“So capital is exiting, Nigerians are moving against Naira. This is the perfect combination for the storm, for the devastating impact. So if that happens, who suffers? It’s not Mr. President that will suffer the most, it’s the average Nigerian.”
The minister maintained that the consequences of restoring fuel subsidy would extend beyond financial markets, affecting the cost of fuel and the wider economy.
His warning comes as the government continues to defend its economic reforms, including the removal of fuel subsidy, against calls for measures to ease the cost of living.
Oyedele said the reforms had attracted positive reactions from investors but acknowledged the need to explain their implications to Nigerians.
He said his efforts to explain the government’s position were driven by concerns about the public’s understanding of the policy rather than electoral considerations.
“I said to be honest, the reason why I’m explaining is because of the Nigerian people themselves. It’s not because I’m trying to get Mr. President to win the election.”
Faridah Abdulkadiri
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