Subsidy, FX Reforms Generated N15.8trn in 30 Months — FG

 

The Federal Government has said the removal of petrol subsidy and reforms in the foreign exchange market generated N15.8 trillion in additional resources for the Federation between June 2023 and December 2025.

Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, disclosed the figure on Wednesday while presenting the government’s reform scorecard, explaining how the administration’s major economic policies had affected government finances.

Oyedele clarified that the N15.8 trillion did not enter the Federation Account as a single payment identified as “subsidy savings.” Rather, the gains were reflected through increased revenue collections resulting from the removal of subsidy-related distortions and changes in the foreign exchange regime.

He explained that the weaker naira increased the naira value of dollar-denominated revenues collected by agencies such as the Nigeria Customs Service and the Nigeria Revenue Service, thereby increasing the resources available to the three tiers of government.

According to the minister, the Federal Government received N5.4 trillion of the N15.8 trillion, while states and local governments received N10.4 trillion through the Federation Account.

Oyedele also disclosed that the Federal Government borrowed an additional N11.9 trillion during the period, while generating N3.1 trillion in incremental independent revenue. These sources, combined with the reform gains, brought the additional resources available to the Federal Government during the period to N20.4 trillion.

However, government expenditure increased substantially during the same period. Oyedele said total incremental expenditure stood at N30.64 trillion, with significant portions going towards higher wages, debt servicing and infrastructure projects.

The minister said N9.39 trillion was spent on wage adjustments, minimum wage increases and allowances for public servants, while N9.37 trillion went towards servicing external debt. Another N6.5 trillion was committed to strategic infrastructure projects.

The government has continued to defend the reforms as necessary measures to address long-standing fiscal distortions and prevent a deeper economic crisis. However, it has also acknowledged that the policies imposed significant hardship on households and businesses, with the full benefits yet to translate into improved living conditions for many Nigerians.

The disclosure provides a fresh explanation of where the widely discussed subsidy savings went, while also highlighting the difficult fiscal choices facing the government as it attempts to balance higher public revenues, rising expenditure, debt obligations and the continuing pressure on household incomes.