Nigeria will spend a total of N5 trillion if the federal government carries on with the petrol subsidy regime in 2023.

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Business rating and economic intelligence company, Agusto.&.Co gave this forecast recently.

The agency also projected that a gradual downward adjustment of the official exchange rate to N480-N500/$ and a simultaneous increase in FX supply, which would signal a willingness to shift ground, would likely trigger an appreciation of the Naira in the parallel market to N650-N680/$.

The projection is contained in the agency’s recently released report titled ‘2023 Outlook: Nigeria, a Nation on the Precipice’.

However, Augosto & Co. noted that doing away with subsidy would be inflationary and is likely to trigger severe backlash from unions and many sections of the wider public.

Nonetheless, it encouraged the outgoing administration to eliminate the subsidy as it would make way for further and more fundamental fiscal reforms.

Agusto also said that all three leading presidential candidates, on the surface, appear willing to ‘allow’ for a more market-determined exchange rate and added that a successful election would ease frayed nerves and boost investor confidence. 

Also, the agency projects 3 per cent growth for the economywhich is higher than the 2.9 per cent growth estimated by the World Bank but lower than the International Monetary Fund (IMF) 3.2 per cent.