The Executive Chairman of the Nigeria Revenue Service (NRS), Zacch Adedeji, has revealed that Nigeria would have spent as much as N52 trillion on fuel subsidies in 2026 if the policy had not been removed. He said the figure represents about 76% of the proposed N68 trillion national budget, underscoring the heavy burden the subsidy placed on public finances before recent reforms.
Adedeji made the disclosure on Tuesday during the commissioning of the new NRS headquarters in Abuja. He explained that the removal of fuel subsidies has significantly improved Nigeria’s fiscal position, freeing up resources that would otherwise have been consumed by subsidy payments.
According to him, maintaining the subsidy regime would have left the government with very limited funds for critical development projects. “Fuel subsidies alone would have consumed about 76% of the N68 trillion budget. At an oil price of $120 per barrel, we were looking at over N52 trillion in subsidy costs,” he said, adding that such spending would have severely restricted investment in infrastructure, healthcare, and social services.
He further noted that Nigeria’s economic position has strengthened since the policy change, with external reserves rising to about $34 billion compared to a projected $2 billion if subsidies had continued. Adedeji also highlighted improved revenue generation, better fiscal transparency, and increased allocations to state governments as key benefits of the reforms.
The subsidy removal, first announced by President Bola Ahmed Tinubu during his inauguration in May 2023, marked a major shift in Nigeria’s economic direction. While the policy had long helped keep fuel prices artificially low, it placed enormous pressure on government finances for decades. Officials say the ongoing reforms are aimed at stabilising the economy, boosting investor confidence, and ensuring long-term fiscal sustainability.
source: nairametrics