Subsidy Reform Saved ₦15.8trn, Averted Deeper Crisis — FG
The Federal Government has said the removal of fuel subsidy and unification of the foreign exchange market have created fiscal space, strengthened Nigeria’s economic position and helped avert a deeper economic crisis.
The government said the reforms generated ₦15.8 trillion in subsidy savings for the Federation between June 2023 and December 2025, with ₦5.4 trillion accruing to the Federal Government and ₦10.4 trillion shared among states and local governments.
The Minister of Information and National Orientation, Mohammed Idris, disclosed this on Wednesday in Abuja at a press conference convened to present the Federal Government’s “Nigeria’s Reform Scorecard: The Benefits, Costs and Harms Prevented.”
Idris said the economic reforms introduced by President Bola Tinubu’s administration were strengthening Nigeria’s fiscal position while creating resources for investment in infrastructure, security, human capital development and social protection.
He acknowledged that the removal of fuel subsidy had imposed significant costs on households, businesses and communities, but said the decision was necessary to redirect resources from an unsustainable subsidy regime to more productive uses.
“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,” Idris said.
He described the scorecard as part of the administration’s commitment to transparency and accountability, saying government had a responsibility not only to announce policies but also to explain their implications and account for their outcomes.
Presenting the scorecard, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said the exercise was not intended as a declaration of victory but an account of what the reforms had cost, delivered and prevented.
According to him, the ₦15.8 trillion subsidy savings formed part of a wider increase in resources available to the Federation following the reforms.
The Federal Government also generated ₦3.1 trillion in incremental independent revenue, principally through remittances from government-owned entities, while ₦11.9 trillion came from incremental borrowing.
Together, the additional resources brought the Federal Government’s incremental resources to ₦20.4 trillion between June 2023 and December 2025.
Oyedele said the resources were deployed alongside the government’s existing revenue base to fund ₦30.64 trillion in incremental expenditure.
The three largest expenditure lines were ₦9.39 trillion spent on wage adjustments, minimum wage increases and allowances for public servants; ₦9.37 trillion on external debt service; and ₦6.5 trillion on strategic infrastructure.
The minister said the figures demonstrated that subsidy removal was not primarily a revenue-raising exercise, noting that the Federal Government’s ₦5.4 trillion share of the subsidy savings was lower than the ₦9.39 trillion spent on wage-related adjustments.
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He said the reforms were principally aimed at addressing entrenched corruption and distortions associated with the former fuel subsidy regime and multiple foreign exchange rates.
Oyedele said 58 per cent of the Federal Government’s ₦20.4 trillion incremental resources came from borrowing, 27 per cent from subsidy savings and 15 per cent from other revenue.
He added that about two-thirds of the ₦30.64 trillion incremental expenditure was funded through the additional resources, while approximately ₦10 trillion came from the existing revenue base.
The Finance Minister said the reforms had also contributed to improvements in several macroeconomic indicators.
According to the government, headline inflation had eased to 15.91 per cent as of June 2026, while gross foreign reserves stood at $52.5 billion and real GDP growth strengthened to 3.89 per cent.
Oyedele also cited Nigeria’s improved standing in international financial markets, including a sovereign credit-rating upgrade by S&P Global and the country’s exit from international anti-money laundering deficiency lists.
However, he acknowledged that the reform programme had not yet fully translated into improved household welfare.
He identified poverty and household welfare as areas requiring greater attention in the next phase of the administration’s economic programme.
The government plans to expand cash transfers to vulnerable households, deepen agricultural interventions aimed at reducing food prices and work more closely with states and local governments to ensure that the benefits of economic reforms reach communities.
In his remarks, the Minister of Budget and Economic Planning, Abubakar Atiku Bagudu, said the reforms were driven by the need to address the country’s historically low revenue-to-GDP ratio and limited fiscal capacity.
Bagudu said President Tinubu inherited an economy with significant fiscal constraints and had to make difficult choices to address leakages, restore confidence and create room for investment.
He said the reforms were also accompanied by measures designed to cushion vulnerable Nigerians from their immediate effects.
According to him, increased government revenues would strengthen the capacity of the Federal Government to meet its constitutional responsibilities and finance development across the country.
Bagudu said resources generated and mobilised through the reforms were being deployed to projects and programmes across Nigeria’s six geopolitical zones, including investments in connectivity, security, infrastructure and economic opportunities.
Idris said the government would continue engaging Nigerians on both the gains and challenges of the reforms.
He stressed that the ultimate objective was to ensure that improved fiscal stability translated into better living conditions, increased economic opportunities and improved public services for Nigerians.
Oyedele similarly described the scorecard as a mid-course assessment rather than the final verdict on the reforms, saying the government would continue measuring their impact on Nigerians through indicators such as income, employment, productivity, growth and shared prosperity.
The Federal Government said the exercise was intended to give Nigerians and independent analysts access to the figures and methodology behind its assessment, allowing the public to scrutinise both the benefits claimed by government and the costs associated with the reforms.
