The Federal Government spent ₦30.64 trillion addressing the impact of its economic reforms during the 30 months following President Bola Tinubu’s removal of the petrol subsidy, exceeding the ₦20.4 trillion raised in additional revenue and borrowing by 50.2 per cent.
Details of the financial impact were presented in the Federal Government’s Nigeria Reform Scorecard, titled “The Benefits, Costs and Harm Prevented”, released during a news conference in Abuja on Wednesday.
Speaking at the event, Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, explained that the reform measures, primarily the petrol subsidy removal and foreign exchange market unification, mobilised ₦15.8 trillion in cumulative savings for the Federation between June 2023 and December 2025.
Oyedele clarified that these funds were not deposited into a dedicated account labelled “subsidy savings.” Instead, the reforms increased the local currency value of statutory collections, leading to higher revenue yields from agencies such as Customs and from Petroleum Profit Tax. He added that the exchange rate flotation also eliminated an implicit currency subsidy that had previously benefited “rent-seekers” rather than ordinary citizens.
Under the statutory allocation formula, the Federal Government received 34 per cent (₦5.4 trillion) of the total ₦15.8 trillion generated across the Federation. State governments received 41 per cent (₦6.5 trillion), while the 774 local government areas were allocated the remaining 24 per cent (₦3.9 trillion).
To meet its fiscal requirements, the Federal Government generated an additional ₦3.1 trillion in independent revenue, chiefly through remittances from state-owned enterprises, and secured ₦11.9 trillion through borrowing. This brought total incremental federal resources to ₦20.4 trillion, with borrowing making up 58 per cent, subsidy revenue 27 per cent, and independent earnings 15 per cent.
However, federal expenditure over the 31-month period reached ₦30.64 trillion, creating a ₦10.24 trillion shortfall that was absorbed by the existing revenue base. The government noted that for every ₦100 generated in new resources, it spent roughly ₦150.
More than 82 per cent of the incremental expenditure went toward three major lines: Wage adjustments (₦9.39 trillion), External debt servicing (₦9.37 trillion), and Infrastructure (₦6.47 trillion).
The remaining spending included ₦3.14 trillion for electricity subsidies, ₦1.24 trillion for domestic debt servicing amid rising interest rates, ₦423.8 billion for social welfare transfers, ₦419.1 billion for interventions including the Ecological Fund and Federal Capital Territory, and ₦201.26 billion to cover the increased naira cost of international obligations.
The disclosures address long-standing public demands regarding the whereabouts of the funds freed up since President Tinubu announced the end of the subsidy on 29 May 2023. Although Tinubu previously stated in July 2023 that over ₦1 trillion had been saved in the early months of the policy to fund infrastructure and social programmes, surging living costs had fueled calls for greater fiscal transparency.
Addressing the economic impact on citizens, Oyedele acknowledged that the decisions brought significant hardship, noting, “Those decisions came at a real cost, and we are not here to pretend otherwise. Prices rose. The naira adjusted sharply. Households and businesses felt it, and many still do.”
He stated that the scorecard was not released to “declare a victory, but to give an account” of how the funds were utilised, adding that the measures ultimately prevented a deeper economic crisis and improved long-term public financial management.