The Federal Government says the removal of petrol subsidy and foreign exchange reforms saved the Federation N15.8tn between June 2023 and December 2025, while incremental government expenditure during the period rose to N30.64tn.
Finance and Coordinating Minister of the Economy, Taiwo Oyedele, disclosed this on Wednesday while presenting the Federal Government’s Nigeria Reform Scorecard, titled “The Benefits, Costs and Harm Prevented.”
Oyedele said the N15.8tn savings were not kept in a separate account but reflected in increased naira revenues accruing to the Federation following the reforms.
He explained that the removal of the subsidy and foreign exchange reforms increased the naira value of revenues collected from Customs, petroleum taxes and other sources.
According to him, the Federal Government received N5.4tn, representing 34 per cent of the N15.8tn, while states received N6.5tn and local governments N3.9tn through the Federation Account allocation formula.
Oyedele said the Federal Government’s total incremental resources during the period stood at N20.4tn, comprising N11.9tn from additional borrowing, N5.4tn from its share of the subsidy savings and N3.1tn in additional independent revenue.
However, incremental expenditure reached N30.64tn, leaving a funding gap of N10.24tn, which the minister said was largely met from the government’s existing revenue base.
The expenditure, he said, was driven mainly by higher wages, debt servicing and infrastructure development.
The government spent N9.39tn on wage adjustments, including the new minimum wage, wage awards and allowances for public servants, while N9.37tn went into additional external debt servicing arising from the depreciation of the naira.
Another N6.47tn was spent on strategic infrastructure development.
The three expenditure areas accounted for more than N25tn, or over 82 per cent, of the total incremental spending.
Other expenditures included N3.14tn in additional electricity subsidy costs, N1.24tn in increased domestic debt servicing, N423.8bn in social welfare transfers and N419.1bn for the Federal Capital Territory, Ecological Fund, Natural Resource Fund and other interventions.
Oyedele stressed that the N15.8tn was not generated by petrol subsidy removal alone, saying the foreign exchange reforms also eliminated what he described as an implicit subsidy that had benefited rent-seekers.
“Not just the subsidy removal, but also the exchange rate flotation, because we were subsidising the exchange rate. And that subsidy was not going to the ordinary person or manufacturers. It was going to rent-seekers,” he said.
The minister acknowledged that the reforms came with significant costs, including higher prices, a sharp adjustment in the value of the naira and increased pressure on households and businesses.
“We invited you here today not to declare a victory, but to give an account,” Oyedele said, insisting that the government was providing details of both the benefits and costs of the reforms.
Minister of Information and National Orientation, Mohammed Idris, described the subsidy removal as one of the administration’s most difficult economic decisions but said it was necessary to redirect resources from an unsustainable subsidy regime to productive investments.
Budget and Economic Planning Minister, Abubakar Atiku Bagudu, said the government inherited an economy with limited fiscal capacity and a low revenue-to-GDP ratio.
He said the reforms were aimed at addressing fiscal leakages, restoring confidence in the economy and creating greater room for investment in infrastructure, security and human capital development.
The disclosure provides the administration’s latest detailed account of the financial impact of the reforms, amid persistent questions over the whereabouts and utilisation of savings from the petrol subsidy removal announced by President Bola Tinubu in May 2023.
