The Federal Government says it spent N30.64tn on additional expenses linked to economic reforms introduced by President Bola Tinubu, even as the removal of petrol subsidy and foreign exchange reforms generated N15.8tn in extra resources for the Federation.
The figures cover the 31-month period from June 2023 to December 2025 and were presented by the Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, during the unveiling of the Nigeria Reform Scorecard, titled “The Benefits, Costs and Harm Prevented.”
According to the report, the reforms expanded the resources available to the Federal Government by N20.4tn. This came from higher revenue, gains associated with the petrol subsidy removal and additional borrowing.
However, government spending rose by N30.64tn during the same period, creating a funding gap of N10.24tn.
The government said the difference was met from its existing revenue rather than through excessive monetary financing.
Oyedele explained that the N15.8tn described as subsidy savings was not money transferred into a separate account or recorded under a specific “subsidy savings” heading in the Federation Account.
Instead, the reforms increased the naira value of revenue collected by government agencies.
For example, dollar-based transactions handled by Customs and other revenue-generating agencies produced more naira after the exchange rate adjustment.
The minister also stressed that the increase in resources did not come from petrol subsidy removal alone. He said the unification and flotation of the foreign exchange market also removed an exchange-rate subsidy that had, according to the government, created room for arbitrage and rent-seeking.
The N15.8tn generated for the Federation was distributed through the existing revenue-sharing arrangement.
The Federal Government received N5.4tn, equivalent to 34 per cent. States got N6.5tn, or 41 per cent, while local governments received N3.9tn, representing 24 per cent.
Beyond the reform-related resources, the Federal Government recorded N3.1tn in additional independent revenue, largely from higher remittances by government-owned entities.
It also raised N11.9tn through additional borrowing.
Consequently, the Federal Government’s total additional resources reached N20.4tn. Borrowing accounted for 58 per cent, subsidy-related gains represented 27 per cent, while other revenue made up the remaining 15 per cent.
On the expenditure side, wage-related commitments took the largest share, with N9.39tn spent on salary adjustments, the new minimum wage, wage awards and allowances for public servants.
Debt servicing was another major pressure point. The government spent N9.37tn more on external debt service because the depreciation of the naira increased the cost of meeting obligations denominated in foreign currencies.
Infrastructure development accounted for another N6.47tn.
Together, the three areas consumed N25.22tn, more than 82 per cent of the total additional expenditure recorded during the period.
The government’s other expenses included N3.14tn for electricity subsidies, N1.24tn in additional domestic debt service arising from higher interest rates and N423.8bn for social welfare transfers.
A further N419.1bn went to the Federal Capital Territory, Ecological Fund, Natural Resource Fund and other interventions, while N201.26bn covered the increased naira cost of foreign obligations.
Oyedele said the additional borrowing would have been significantly higher without the fiscal space created by the reforms.
He argued that the new resources helped the government meet rising obligations without returning to the level of monetary financing that previously put additional pressure on the economy.
The disclosure comes amid years of questions over what happened to the money saved after Tinubu announced the end of petrol subsidy on May 29, 2023.
The President had said funds previously used to support fuel prices would be redirected towards projects and programmes that would provide greater benefits to Nigerians.
But the policy triggered a sharp rise in transport costs and contributed to increased pressure on household expenses, prompting Nigerians to demand a clear explanation of how the savings were being used.
Oyedele said the latest scorecard was intended to provide that explanation, stressing that the savings did not accumulate as idle funds.
Rather, he said, the additional resources were absorbed by increased salaries, debt obligations, infrastructure spending, electricity support and other government commitments.
He also acknowledged that the reforms had imposed serious costs on Nigerians.
According to him, the government was not presenting the policies as painless, as households and businesses had experienced higher prices and a major adjustment in the value of the naira.
The Minister of Information and National Orientation, Mohammed Idris, described the subsidy removal as one of the administration’s most difficult economic decisions.
He said the government understood the hardship caused by the reforms but maintained that the old subsidy arrangement was no longer sustainable.
Idris said redirecting resources towards infrastructure and other productive areas would provide more lasting benefits than continuing to fund the previous subsidy system.
The Minister of Budget and Economic Planning, Abubakar Atiku Bagudu, said the administration inherited an economy with weak revenue generation and limited fiscal room.
He said the government therefore had to address financial leakages and undertake difficult reforms to create more room for investment in infrastructure, security, human capital and development.
Bagudu added that the government had introduced measures intended to reduce the burden of the reforms on vulnerable Nigerians.
The government maintains that the reforms have strengthened the financial position of the Federation, increased revenue capacity and given states greater room to meet their obligations.
However, the figures also show the scale of the fiscal pressure faced by the Federal Government: while the reforms generated N20.4tn in additional resources for the government, its incremental spending reached N30.64tn, leaving about N10.24tn to be covered from its existing revenue base.
