Subsidy removal generated ₦15.8trn for federation in 30 months — Oyedele

Taiwo Oyedele, minister of finance and coordinating minister of the economy, says the removal of petrol subsidy generated ₦15.8 trillion in resources for the federation between June 2023 and December 2025.

Oyedele made the disclosure on Wednesday during a media conference on the performance of Nigeria’s reforms between 2023 and 2026.

He said the savings were reflected in increased revenue collections, particularly as the naira value of dollar-denominated transactions rose after the exchange-rate reform.

“Between June 2023 and December 2025, subsidy savings mobilised the sum of N15.8 trillion in resources for the federation,” Oyedele said.

The minister said the federal government received ₦5.4 trillion from the amount, while ₦10.4 trillion was distributed to state and local governments.

He added that the federal government recorded ₦3.1 trillion in additional independent revenue during the period, mainly from remittances by government-owned entities.

According to Oyedele, the federal government’s combined additional resources from subsidy savings, independent revenue and borrowing stood at ₦20.4 trillion.

“Altogether, the federal government’s incremental resources over the period — subsidy savings, independent revenue, and incremental borrowing — came to N20.4 trillion,” he said.

Oyedele said the ₦11.9 trillion increase in borrowing would have been “far higher and economically destabilising” without the fiscal space provided by the reforms.

He said the federal government recorded ₦30.64 trillion in additional expenditure over the same period.

Of that figure, ₦9.39 trillion went towards wage adjustments, minimum wage increases and allowances for public servants.

Another ₦9.37 trillion was used for external debt servicing, while ₦6.5 trillion was allocated to strategic infrastructure, he said.

Oyedele said spending on wage adjustments was higher than the federal government’s entire share of the savings generated from subsidy removal.

“The incremental amount that the federal government spends paying higher wages is more than the entire savings that the federal government earned from subsidy removal,” he said.

He attributed the rise in external debt servicing largely to the depreciation of the naira, explaining that although the dollar-denominated debt remained unchanged, servicing it required more naira.

“If we were paying $1 million before in interest on our foreign debt, it is still the same $1 million, but instead of N460, it’s now N1,415,” Oyedele said.

“That’s more naira that we need to incur. And I’ve said this before, when you have debt service to pay, you don’t negotiate, you don’t delay, you pay. Because delay or defaults have consequences.”

The minister said the figures demonstrated that the reforms were not primarily aimed at boosting government revenue, but at tackling “entrenched corruption in the artificially managed fuel subsidy and foreign exchange markets”.