The Federal Government has clarified that the N15.8 trillion estimated savings from fuel subsidy removal and the unification of the naira exchange rate between June 2023 and December 2025 did not amount to a huge pool of cash at its disposal.
Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, disclosed this on Wednesday in Abuja while presenting the government’s economic reforms scorecard.
Oyedele explained that the estimated N15.8 trillion subsidy savings was distributed among the Federal Government, state governments, local governments and other statutory beneficiaries.
According to him, the Federal Government received only N5.43 trillion of the total savings.
He said the Federal Government’s total incremental resources during the period amounted to about N20.4 trillion, comprising its share of subsidy savings, additional revenues and borrowing.
The minister disclosed that the amount included N5.43 trillion from subsidy savings, N3.12 trillion in additional revenues and N11.85 trillion in new borrowing.
However, the Oyodele noted that the government’s incremental expenditure over the same period was significantly higher, totaling approximately N30.64 trillion.
He said the additional expenditure was driven largely by higher wage costs, debt servicing, infrastructure projects, electricity support, social programmes and other government obligations.
He noted that the figures should therefore be understood primarily as a financing story, rather than being viewed simply as a savings story.
“The N15.8 trillion commonly described as subsidy savings was not retained by the Federal Government alone. It was shared across all the tiers of government.
“The Federal Government’s estimated share was N5.43 trillion. When combined with N3.12 trillion in other incremental revenues and N11.85 trillion in incremental borrowing, the Federal Government had approximately N20.4 trillion in incremental resources,” he said.
He explained that the N30.64 trillion in additional expenditure significantly exceeded the savings from subsidy removal, leaving the government with a funding gap as its financial obligations increased.
“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,” Oyedele said.
The minister’s clarification comes amid widespread perceptions that the removal of the petrol subsidy released a substantial pool of funds for the Federal Government to spend.
Oyedele, however, said the reform should be viewed primarily as a measure that reduced pressure on government finances and helped limit the need for additional borrowing.
