Thirty months after President Bola Tinubu removed the petrol subsidy, the Federal Government has disclosed that the reforms generated N15.8tn in additional resources for the Federation, while the government recorded N30.64tn in incremental expenditure between June 2023 and December 2025. The figures, contained in the government’s latest Nigeria Reform Scorecard, offer one of the clearest breakdowns yet of how the financial impact of the subsidy removal and foreign exchange reforms was managed.
According to the Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, the N15.8tn should not be interpreted as cash sitting in a separate government account labelled “subsidy savings.” Instead, the resources emerged through higher naira revenues following the removal of the petrol subsidy and the unification of the foreign exchange market. Oyedele explained that the reforms increased the naira value of revenues collected from areas such as Customs and petroleum-related taxes.
However, the Federal Government did not receive the entire N15.8tn. Under the Federation Account allocation formula, N5.4tn, representing 34 per cent, went to the Federal Government, while states received N6.5tn and the 774 local governments received N3.9tn. The Federal Government also generated N3.1tn in additional independent revenue, while N11.9tn came from additional borrowing, bringing its total incremental resources during the period to N20.4tn.
Despite the additional resources, government expenditure rose significantly, reaching N30.64tn. The largest expenses included N9.39tn for wage adjustments, minimum wage increases and allowances for public servants, N9.37tn for additional external debt servicing caused by the naira’s depreciation, and about N6.47tn for strategic infrastructure projects. Together, these three areas accounted for more than N25tn, or over 82 per cent, of the total incremental expenditure.
The disclosure comes amid years of public debate over where the savings from petrol subsidy removal have gone, particularly as Nigerians continue to deal with higher transportation, food and living costs. The government maintains that the reforms were necessary to prevent a deeper fiscal crisis and create room for infrastructure, social programmes and economic investment. Oyedele acknowledged that the reforms came with significant costs for households and businesses, but argued that the latest scorecard provides a clearer picture of both the resources generated and how they were spent.
source: punch
