The Federal Government says Nigeria recorded an estimated ₦15.8 trillion in savings from fuel subsidy removal and foreign exchange liberalisation between June 2023 and December 2025, but stressed that the money did not amount to a huge pool of cash sitting with the Federal Government.
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, disclosed this in Abuja while presenting the scorecard of the administration’s economic reforms.
Oyedele explained that the ₦15.8 trillion in savings was distributed among the three tiers of government and other statutory beneficiaries.
The Federal Government received ₦5.43 trillion, state governments received ₦6.52 trillion, while local government councils received ₦3.88 trillion.
He said the Federal Government generated about ₦20.4 trillion in incremental resources during the period through subsidy savings, increased revenues and additional borrowing.
However, the government spent approximately ₦30.64 trillion on wages, debt servicing, infrastructure, electricity support and other obligations.
“The figures tell a financing story, not simply a savings story,” Oyedele said.
The minister explained that subsidy savings mainly helped to reduce fiscal pressure and lowered the amount the government would otherwise have needed to borrow.
According to him, the ₦15.8 trillion commonly described as subsidy savings was not retained by the Federal Government alone. It was shared among the Federal, State and Local Governments, alongside other statutory beneficiaries.
He said the government also recorded ₦3.12 trillion in other incremental revenues and ₦11.85 trillion in incremental borrowing, bringing the Federal Government’s incremental resources to about ₦20.4 trillion.
During the same period, additional expenditure reached approximately ₦30.64 trillion.
Oyedele therefore argued that subsidy removal did not create a single large pool of cash for the Federal Government but instead reduced a major fiscal burden and the amount of borrowing that would otherwise have been required.
Wage Bill Exceeded Subsidy Savings
Oyedele disclosed that the Federal Government spent ₦9.39 trillion on wages during the period under review.
He said the expenditure was largely driven by the new national minimum wage, wage awards, allowances and other personnel-related costs.
The government also spent ₦9.37 trillion servicing external debt, with Oyedele attributing the higher naira cost of servicing foreign obligations partly to the depreciation of the naira.
Another ₦6.47 trillion was invested in strategic infrastructure covering transport, housing, agriculture and security projects.
In addition, ₦3.14 trillion was spent on electricity subsidies aimed at cushioning consumers from the impact of higher electricity tariffs.
Why Government Still Borrows
The finance minister explained that the Federal Government continued borrowing because its revenue remained insufficient to meet its expenditure requirements.
He said approximately two-thirds of the additional spending was financed through incremental resources generated by the reforms, while the remaining portion came from existing government revenue.
Oyedele stressed that subsidy removal reduced the amount of borrowing that would have otherwise been necessary, rather than eliminating the government’s need to borrow altogether.
He also noted that government borrowing remains subject to National Assembly approval and compliance with existing fiscal and debt management laws.
How the Resources Were Used
Oyedele said resources generated through the reforms had been directed towards programmes intended to improve citizens’ welfare and support economic growth.
Among the areas he listed were salary increases, timely payment of salaries and pensions, settlement of pension arrears and gratuities, expansion of the Nigerian Education Loan Fund (NELFUND) and affordable credit schemes for consumers and small and medium-sized businesses.
He also listed several major infrastructure projects funded during the period.
These include the Lagos-Calabar Coastal Highway, estimated at ₦2.23 trillion; the Sokoto-Badagry Super Highway, valued at ₦1.11 trillion; the Trans-Sahara Super Highway, estimated at ₦489.2 billion; and the Road Emergency Intervention Project, valued at ₦366 billion.
The minister acknowledged that the economic reforms had caused significant hardship for Nigerians but said the government had introduced social intervention programmes to cushion their impact.
Abu Dhabi Loan to Diversify Funding
Meanwhile, the Director-General of the Debt Management Office (DMO), Patience Oniha, said the Federal Government’s loan arrangement with First Abu Dhabi Bank was designed to diversify Nigeria’s funding sources and secure financing on competitive terms.
Oniha said the transaction followed due process, having received approval from the National Assembly and complied with relevant provisions of the Fiscal Responsibility Act.
She explained that the objective was to broaden the country’s resource base while accessing financing at competitive rates and maintaining transparency within Nigeria’s debt management framework.
“The objective is to diversify our resource base and access funding at competitive rates while maintaining transparency and compliance with the country’s debt management framework,” Oniha said.
The government maintains that the reforms have helped ease fiscal pressure and reduce the need for additional borrowing, even as Nigerians continue to deal with the effects of higher living costs and the wider economic adjustments.
