The Federal Government says the economic reforms introduced since June 2023 generated N15.8tn in additional resources for the Federation, but the government incurred N30.64tn in incremental expenditure over the same period.
The figures were disclosed in the Nigeria Reform Scorecard, titled The Benefits, Costs and Harm Prevented, released on Wednesday by the Federal Government.
The scorecard provides the administration’s account of the financial impact of the removal of petrol subsidy and the unification of the foreign exchange market introduced by President Bola Tinubu.
Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said the reforms created substantial fiscal space but did not result in a separate pool of cash that could be identified as “subsidy savings”.
According to him, the N15.8tn was reflected in increased revenue accruing to the Federation, rather than through a specific line item in the Federation Account.
“Between June 2023 and December 2025, subsidy savings mobilised a sum of N15.8tn in resources for the Federation,” Oyedele said.
He explained that the removal of the subsidy and foreign exchange reforms increased the naira value of revenues collected by government agencies.
He cited Customs collections and taxes such as Petroleum Profit Tax, noting that the same dollar-denominated transactions generated significantly more naira revenue after the exchange rate reforms.
Oyedele also stressed that the additional resources were not generated solely by the removal of the petrol subsidy.
He said the floating of the naira eliminated an implicit foreign exchange subsidy which, according to him, had benefited rent-seekers rather than ordinary Nigerians and manufacturers.
“Not just the subsidy removal, but also the exchange rate flotation, because we were subsidising the exchange rate. And that subsidy was not going to the ordinary person or manufacturers. It was going to rent-seekers,” he said.
FG gets N5.4tn
Of the N15.8tn generated for the Federation, the Federal Government received N5.4tn, representing 34 per cent, according to the scorecard.
States received N6.5tn, or 41 per cent, while the 774 local government areas received N3.9tn, representing 24 per cent.
The government said its additional resources from all sources stood at N20.4tn during the period under review.
Additional independent revenue contributed N3.1tn, while N11.9tn came from incremental borrowing.
The Federal Government said borrowing accounted for 58 per cent of its additional resources, subsidy savings contributed 27 per cent, while other revenue accounted for 15 per cent.
However, the government’s incremental expenditure during the 31-month period was substantially higher, reaching N30.64tn.
This left a funding gap of about N10.24tn, which the government said was financed from its existing revenue base.
Oyedele said the additional resources were largely absorbed by new and rising government obligations, rather than being left unused.
“Altogether, the Federal Government’s incremental resources over the period came to N20.4tn. That money did not sit idle; it partly funded incremental expenses of N30.64tn,” he said.
He argued that the figures demonstrated the extent to which the reforms had created fiscal space, adding that the government would otherwise have had to rely more heavily on monetary financing.
Wages, debt service dominate spending
Wage-related expenditure accounted for one of the largest portions of the additional spending.
The government spent N9.39tn on wage adjustments, including the implementation of the new national minimum wage, wage awards and allowances for public servants.
Another N9.37tn went into additional external debt servicing, largely due to the depreciation of the naira.
Strategic infrastructure projects accounted for N6.47tn.
The three expenditure categories amounted to about N25.22tn, representing more than 82 per cent of the total incremental expenditure.
Other expenditure included N3.14tn on electricity subsidies and N1.24tn on higher domestic debt servicing linked to increased interest rates.
The government also spent N423.8bn on social welfare transfers and N419.1bn on the Federal Capital Territory, Ecological Fund, Natural Resource Fund and other interventions.
An additional N201.26bn was spent on the increased naira cost of foreign obligations.
Oyedele said the government had accounted for the expenditure and that the detailed breakdown was contained in the reform scorecard.
Reform costs acknowledged
The government acknowledged that the reforms had imposed significant economic pressures on households and businesses.
Oyedele said the administration was not presenting the scorecard as a declaration of victory but as an attempt to account for the benefits and costs of its policies.
“We invited you here today not to declare a victory, but to give an account,” he said.
He acknowledged that prices increased, the naira depreciated sharply and households and businesses experienced significant economic difficulties following the reforms.
The minister, however, maintained that the policies were necessary to address structural weaknesses in the economy.
According to him, the fuel subsidy had become unsustainable, while the multiple exchange rate system had encouraged arbitrage, distortions and corruption.
Govt defends subsidy removal
The Minister of Information and National Orientation, Mohammed Idris, described the removal of the petrol subsidy as one of the most significant and difficult decisions taken by the Tinubu administration.
Idris said the government recognised the hardship caused by the policy but maintained that redirecting resources from the subsidy regime towards productive investments was necessary.
“Citizens have a right to know what resources have been freed up, what these resources mean for the Federation, and how the benefits of reform are being translated into tangible improvements in their lives,” he said.
Minister of Budget and Economic Planning, Senator Abubakar Atiku Bagudu, said the administration inherited an economy with limited fiscal capacity and one of the world’s lowest revenue-to-GDP ratios.
He said the government had to take difficult decisions to address fiscal leakages, restore confidence and create room for investment in security, infrastructure, human capital and grassroots development.
Bagudu said the government had also introduced interventions to cushion the impact of the reforms on vulnerable Nigerians.
He added that resources mobilised through the reforms were being deployed to projects and programmes across the six geopolitical zones.
The latest disclosure comes more than three years after President Tinubu announced the removal of petrol subsidy on May 29, 2023.
The policy immediately triggered an increase in petrol prices and contributed to higher transportation and living costs, prompting persistent demands for greater transparency over the savings generated from the reform.
The government has now maintained that the savings were not kept in a separate account but were reflected through increased Federation revenues and subsequently absorbed by rising government expenditure.
The scorecard therefore represents the administration’s most detailed explanation so far of the financial impact of the subsidy removal and associated economic reforms.
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