Sunday Edition — Nigeria Is Not a Rich Country

EDITOR'S NOTE

I always wondered if Nigeria was actually rich. Tope has spent years telling me it isn't, and this week he finally put the argument on paper. He uses the recent subsidy talk, this time from Atiku Abubakar, as the opening to ask a bigger question: if Nigeria can't actually afford to subsidize fuel, what does that tell us about how rich the country really is? What follows is Tope's case, in cold numbers, that the answer is no.

Nigeria Is Not a Rich Country

 

Recently, former Vice President Atiku Abubakar supported restoring the fuel subsidy. His argument rests on the premise that dominates our national discourse: Nigeria is a very rich country, and we can afford to protect our citizens from market prices.

This idea that Nigeria is a rich country appears constantly among citizens and elites alike. It is the closest thing we have to a universally shared dogma.

I understand why. We produce oil and gas. We have gold, lithium, iron ore, bitumen, and God knows what else buried underneath us. Saudi Arabia and the UAE also have oil, and they are wealthy. The argument is seductive because it feels true, but it isn't. It is dangerous. It justifies terrible policies: bringing back the fuel subsidy, dogmatic defenses of the naira, widespread tax evasion, and a general aversion to wealth creation.

Nigeria is not a rich country. We are a very poor one.

In 2026, Nigeria is projected to produce roughly 1.71 million barrels of oil per day. At an optimistic $80 a barrel, our oil's absolute maximum gross value is about $50 billion a year. That sounds like a lot of money until you remember the denominator: over 240 million people. That production translates to just 2.5 barrels of oil per Nigerian, per year. Compare that to the true petro-states we benchmark ourselves against. Saudi Arabia produces roughly 91 barrels per citizen, and Kuwait produces 209. We simply lack the oil wealth to fund a Gulf-style welfare state.

Not every dollar of oil sales goes to the government. After deducting extraction costs and profit-sharing agreements, the IMF projects our total government oil and gas revenue for 2026 at just $13.2 billion. The 2027 budget for New York City, a single city of 8 million people, is $125.8 billion. Nigeria's entire oil revenue is barely double the $6 billion operating budget of the New York Police Department.

Brazil removes the Gulf mystique entirely. In 2025, Brazil produced about 3.7 million barrels a day against our 1.43 million, despite a slightly smaller population of roughly 213 million. That is around six barrels per Brazilian per year against 2.2 per Nigerian. Brazil is an oil producer. But nobody mistakes Brazil for a petro-state expected to subsidize fuel, education, electricity, and every citizen's need with oil wealth while letting them evade taxes.

Then there are our supposedly limitless solid minerals. The Nigerian Investment Promotion Commission advertises more than $700 billion in estimated mineral deposits and lists gold, lithium, iron ore, bitumen, lead-zinc, and others. People hear $700 billion and mentally move it into the treasury. But a geological occurrence is not a reserve; a reserve is not revenue; and multiplying tonnes underground by today's commodity price is not the same thing as saying Nigeria owns a $700 billion cheque.

Take iron ore, gold, and lithium. The U.S. Geological Survey's 2026 reserve tables put Australia at roughly 58 billion tonnes of crude iron ore reserves, 12,000 tonnes of gold reserves, and 7 million tonnes of lithium reserves. Australia has 28 million people, barely an eighth of our population. Nigeria is not separately listed among the major reserve holders for any of the three. That does not mean the minerals are not here. It means broad geological claims have not been converted into economically recoverable national reserve estimates at the scale implied by the rhetoric.

Last year, this mineral wealth produced almost nothing for the government. The Minister of Solid Minerals Development said ministry-generated revenue rose to 68.1 billion naira in 2025, about $43 million, or roughly 18 cents per Nigerian. Not $43 billion, $43 million. Nigeria's minerals are an underexplored opportunity, but we lack the global reserve rankings to call ourselves rich.

Non-oil taxes and internally generated revenue offer no salvation. Consolidating every source of revenue across the federal, state, and local governments, the entire Nigerian state is projected to collect roughly $40.0 billion in 2026. This puts our revenue-to-GDP ratio at a miserable 10.6%, one of the lowest in the world. Divide that $40.0 billion by our population, and you arrive at the most terrifying statistic in the Nigerian political economy: the government has approximately $165 to spend on each citizen, per year.

By contrast, the South African government commands roughly $143 billion in revenue for a population a quarter of our size, equating to over $2,200 per citizen. Egypt collects nearly $600 per citizen. In Nigeria, from that $165, the federal government currently spends over 53% of its retained revenue just servicing historical debt interest. Add the staggering cost of public sector salaries, and the amount left over for infrastructure, healthcare, and education shrinks to less than $30 per citizen.

Atiku did not put a specific price tag on his targeted subsidy, but we can model the scenarios based on market realities. Nigeria currently consumes roughly 47 million liters of petrol daily. Mandating a price discount of just N400 per liter would cost the state roughly $4.5 billion annually. A deeper discount of N600 per liter would consume nearly $6.8 billion.

And that assumes consumption stays flat. The moment fuel becomes artificially cheap, the cross-border smuggling rackets will resurrect. Daily consumption will surge back past 60 million liters, and the subsidy bill will instantly balloon to over $9 billion.

Under these scenarios, subsidizing fuel would comfortably consume 15% to 20% of the entire federation's revenue. It would wipe out what little is left after debt and salaries.

I know the pushback.

First, people point to the politicians. They point to the National Assembly's budget and the cost of governance. The cost of governance is indeed bloated and offensive. But it is a drop in the ocean. The National Assembly's 2025 appropriation was about $218 million. Abolish the entire National Assembly tomorrow and the saving comes to less than $1 per Nigerian. I am not defending one cent of waste, I am simply showing you the size of the pot.

Second, people argue we had the subsidy before, so we can afford it now. We did have it, and we funded it by illegally printing 24 trillion naira through Ways and Means. This drove inflation past 30% and destroyed the purchasing power of the citizens the subsidy claimed to protect. We cannot make that mistake again.

Then there is corruption. It is real and it diverts resources. Had decades of oil revenue been invested properly, Nigeria could be richer today. Money stolen yesterday helped create the poverty we face today. But money stolen yesterday cannot be spent twice. Give the government an extraordinary 50% increase in current revenue from perfect tax collection, recovered theft, and eliminated waste, and you still move from $165 per Nigerian to only $245. That would be enormously useful, but it would not make Nigeria rich. The entire economy produced only about $1,224 per person in 2025. There is no secret fiscal pool large enough to turn that into abundance. Even if you think everything is being stolen, there was never enough to begin with.

Finally, the most painful objection: Nigerians are suffering, and they cannot afford N1,300 fuel. The welfare shock of subsidy removal has indeed been devastating, and there is no denying that expensive transport aggressively drives up food prices for the most vulnerable citizens. But universal subsidies remain a regressive fantasy. They transfer the bulk of state wealth to the upper-middle class with multiple cars and heavy generators. If the goal is social protection, targeted cash transfers or subsidized public transport systems cost a fraction of the price and actually reach the poorest Nigerians.

Nigeria isn't a rich country. We are poor. Our focus must be a maniacal obsession with growing the economy, expanding the tax net, and raising productivity, not fighting over how to consume wealth we do not have. An extra $5 billion a year could guarantee 24/7 power to industrial hubs, rebuild the national rail network, or fund a 21st-century education system. Burning it at the pump is not a choice available to us.

The math is unforgiving, but it is also clarifying. Once we accept that we are not a rich country, we can finally discard the fantasies that have held us back and begin the hard, serious work of actually becoming one.