The Federal Government has unveiled a detailed breakdown of the N15.8 trillion saved from fuel subsidy removal and other gains recorded from economic reforms introduced by President Bola Ahmed Tinubu’s administration over the past three years.
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, disclosed the figures at a press conference on Wednesday, explaining how the savings from the subsidy removal accrued to the Federation Account and were shared among the three tiers of government.
According to Oyedele, the Federal Government received N5.43 trillion, while state governments received N6.52 trillion and local governments received N3.88 trillion from the fuel subsidy removal savings.
He explained that the reforms also generated N3.12 trillion in additional revenues, while the government recorded N11.85 trillion in incremental borrowing during the period under review.
As a result, the Federal Government had approximately N20.4 trillion in incremental resources available during the period.
However, Oyedele stressed that the subsidy removal did not create a single pool of cash that could be freely spent by the Federal Government, but rather reduced a major fiscal burden and the amount of additional borrowing that would otherwise have been required.
“Over the same period, additional expenditures amounted to approximately N30.64 trillion. Subsidy removal therefore did not create one large pool of cash available to the Federal Government. It reduced a major fiscal burden and the amount of additional borrowing that would otherwise have been required,” he said.
The minister disclosed that the government’s additional expenditure of N30.64 trillion included N9.39 trillion for wage adjustments, N9.37 trillion for external debt servicing, N6.47 trillion for infrastructure and N3.14 trillion for electricity subsidies.
The figures provide the administration’s clearest breakdown yet of how resources linked to the fuel subsidy removal and other economic reforms were generated, shared and deployed.
President Tinubu announced the removal of the petrol subsidy in May 2023, followed shortly after by the liberalisation of the foreign exchange market. The measures triggered significant increases in petrol prices and sharp fluctuations in the value of the naira, while the government maintained that they were necessary to reduce fiscal pressures and improve the country’s economic position.
