FG Saves ₦15.8 Trillion From Subsidies In 30 Months, Uses Money

The Federal Government of Nigeria has disclosed that the removal of petrol subsidy and foreign exchange (FX) market reforms generated ₦15.8 trillion in additional resources for the Federation between June 2023 and December 2025. Finance Minister and Coordinating Minister of the Economy Taiwo Oyedele made the disclosure on Wednesday, August 19, 2026, while presenting the government’s Nigeria Reform Scorecard at a media briefing titled “The Benefits, Costs and Harm Prevented.”

Oyedele explained that the ₦15.8 trillion figure covers roughly 30 months of reforms under President Bola Tinubu’s administration. Of this amount, the Federal Government received ₦5.4 trillion (approximately 34 percent), while states and local governments collectively received ₦10.4 trillion through Federation Account Allocation Committee (FAAC) shares. More detailed breakdowns indicate states received about ₦6.5 trillion (41 percent) and local governments about ₦3.9 trillion (24 percent).

How the Savings Materialised

The minister stressed that the resources did not appear as a distinct “subsidy savings” line item in the Federation Account. Instead, they showed up as higher revenue collections. With the naira’s value adjusting after FX unification and flotation, dollar-denominated duties, taxes (including Petroleum Profit Tax), and other receipts translated into substantially larger naira amounts. For example, import duties previously calculated at around ₦460 to the dollar rose significantly at rates exceeding ₦1,000.

Oyedele noted that the gains stemmed not only from ending the petrol subsidy but also from removing an implicit FX subsidy that had primarily benefited rent-seekers rather than ordinary citizens or manufacturers.

Additional Resources and Overall Picture

Beyond the subsidy-related share, the Federal Government recorded ₦3.1 trillion in incremental independent revenue (mainly remittances from government-owned entities) and ₦11.9 trillion in incremental borrowing during the period. Combined, these sources provided the Federal Government with about ₦20.4 trillion in incremental resources.

Officials emphasised that borrowing would have been substantially higher, and more destabilising without the fiscal space created by the reforms. Of the ₦20.4 trillion, roughly 58 percent came from borrowing, 27 percent from subsidy-related savings, and 15 percent from other revenue.

How the Money Was Used

These incremental resources, together with existing revenue, helped fund ₦30.64 trillion in additional expenditure pressures over the same period. The largest categories included:

Wage adjustments, minimum wage increases, and allowances for public servants: ₦9.39 trillion (nearly twice the Federal Government’s direct subsidy savings share).

External debt service (impact of naira depreciation on existing foreign-currency obligations): ₦9.37 trillion.

Strategic infrastructure development: approximately ₦6.5 trillion (or ₦6.47 trillion in some breakdowns).

Incremental electricity subsidy support: about ₦3.14 trillion.

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Smaller amounts went to domestic debt service linked to monetary policy rate increases, social welfare transfers, FCT development, the Ecological Fund, natural resource investments, and higher naira costs of other foreign obligations.

The government highlighted that strategic infrastructure spending supported major projects, including the Lagos–Calabar Coastal Highway and the Sokoto–Badagry Superhighway, among other transport, housing, agricultural, security, and related investments.

Oyedele underscored that the reforms did not create a large idle pool of cash for the Federal Government alone. Rather, they reduced a major fiscal burden, enabled higher allocations to subnational governments, supported wage increases that exceeded the FG’s subsidy share, met rising debt-service costs driven by exchange-rate movements, and channelled funds into infrastructure and social cushions. The administration also argued that the measures helped avert deeper crises, such as far higher petrol prices or widespread difficulties for states in meeting salary obligations.

The Federal Ministry of Finance released supporting figures and methodology in its Reform Scorecard and related presentations for public and independent scrutiny. The disclosures address long-standing public questions about the destination of subsidy-related resources since the policy changes announced in mid-2023.