In a staggering revelation, the World Bank has disclosed that Nigeria's foreign exchange subsidy policy resulted in a whopping N13.2 trillion loss in revenue between 2021 and 2023. This policy, aimed at supporting importers of food and essential services, ultimately led to a significant decline in government revenue.

The policy, which subsidized the exchange rate of the naira against the dollar, created a disparity between the official and parallel market exchange rates, causing the government to lose N2 trillion in 2021, N6.2 trillion in 2022, and N5 trillion in 2023. The termination of this policy in February 2024 has since closed the gap between the official and parallel market exchange rates, allowing for price discovery and foreign exchange supply.

This development is expected to have a positive impact on trade, investment, and growth in Nigeria. The removal of the subsidy is likely to encourage local production, reduce the country's reliance on imports, and boost domestic industries. The government also expects this move to stimulate construction activities and generate significant job creation.