The administration led by President Bola Ahmed Tinubu has outlined the breakdown of N15.8 trillion saved following the removal of fuel subsidy and the implementation of key economic reforms over the past three years.
Speaking at a press conference on Wednesday, Finance Minister Taiwo Oyedele explained the impact of the policy shift, noting that the removal of subsidies contributed N15.8 trillion directly to the Federation Account.
Oyedele added that these accrued savings were distributed among the federal, state, and local government tiers to support public expenditure and regional development.
Finance Minister Taiwo Oyedele explained that the federal government received N5.43 trillion, state governments were allocated N6.52 trillion, and local governments received N3.88 trillion from the fuel subsidy removal savings.
He noted that the broader economic reforms generated an additional N11.85 trillion through borrowing alongside N3.12 trillion in extra revenue.
As a result, the Federal Government gained nearly N20.4 trillion in supplementary resources over the evaluated timeframe. However, Oyedele pointed out that government expenditure rose by N30.64 trillion during the same period.
“The Federal Government had approximately N20.4 trillion in incremental resources.
“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 stated.
Backstory…
Three years after President Bola Ahmed Tinubu announced the removal of Nigeria’s petrol subsidy, the Federal Government is facing renewed questions over what happened to the money saved from the policy.
The subsidy removal was presented as one of the administration’s most important economic reforms. It was expected to free up billions of naira previously spent keeping petrol prices artificially low and allow the money to be redirected towards infrastructure, social programmes and other critical areas.
