The Federal Government has detailed the ₦15.8 trillion generated from the removal of the fuel subsidy and other economic reforms between June 2023 and December 2025, highlighting how these funds were allocated and utilized.
This information was presented by Taiwo Oyedele, the Minister of Finance and Coordinating Minister of the Economy, during a briefing on the government’s reform scorecard in Abuja.
Oyedele explained that the ₦15.8 trillion wasn’t listed as a separate entry in the Federation Account under “subsidy savings.” Instead, these savings augmented resources available to the Federation through increased revenue and decreased subsidy-related expenditures.
Federal Government Allocation: ₦5.4 Trillion
He stated that the Federal Government received ₦5.4 trillion from this sum, while around ₦10.4 trillion was distributed to state and local governments through the Federation Account.
Additionally, he noted that during this period, the Federal Government secured ₦11.9 trillion through borrowing. Government agencies also generated approximately ₦3.1 trillion in independent revenue, significantly boosting the Federal Government’s available resources.
Allocation of Additional Resources
The additional resources, combined with existing revenues, were directed towards meeting significant financial obligations and funding development programs.
The reform scorecard revealed that about ₦9.39 trillion was allocated for wage adjustments, minimum wage increases, and allowances for public sector workers.
Another ₦9.37 trillion was spent on servicing external debt due to the higher naira cost of foreign debt servicing caused by currency depreciation.
About ₦6.5 trillion was earmarked for strategic infrastructure projects.
Justifying Subsidy Removal
The Tinubu administration has consistently justified the removal of the petrol subsidy as essential for creating fiscal space and preventing more severe economic challenges.
Oyedele emphasized that these reforms should be evaluated not just by the immediate difficulties they caused but also by considering the economic distortions and fiscal pressures they helped avoid.
President Bola Tinubu previously stated that eliminating the subsidy was crucial for preventing Nigeria from facing potential bankruptcy.
Nevertheless, these reforms have sparked controversy due to their effect on household incomes and living costs, with the subsidy removal and naira reforms leading to significant price increases before recent inflation easing.
The newly disclosed figures are likely to intensify discussions regarding the distribution of savings from the subsidy removal and the extent to which Nigerians benefit from the government’s economic reforms.
