…Says Minimum Wage Payment Alone Wiped Subsidy Savings
Nigeria’s Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, says the removal of petrol subsidy and reforms to the foreign exchange market generated N15.8tn in resources for the federation between June 2023 and December 2025.
Oyedele disclosed this on Wednesday in Abuja while unveiling the government’s “Nigerians’ Reform Scorecard”, which he said was designed to provide an assessment of the costs, benefits and impact of the economic reforms implemented by the administration.
According to him, the N15.8tn did not appear as a direct credit to the Federation Account labelled “subsidy savings”. Rather, the gains were reflected through higher revenue collections arising from the reforms.
“As a matter of fact, there wasn’t any alert to the Federation Account with the description subsidy savings,” Oyedele said.
He explained that the removal of the subsidy regime and the liberalisation of the foreign exchange market increased the naira value of dollar-denominated customs duties and other government revenues.
“So the savings showed up in the Federation accounts by way of higher revenue collections as a result of the reforms, not just the subsidy removal, but also the exchange rate flotation,” he said.
Oyedele said the previous exchange-rate regime had become a source of arbitrage and corruption rather than providing economic stability.
He said the government had effectively been subsidising foreign exchange, with the benefit not necessarily reaching ordinary Nigerians or manufacturers.
“We were subsidising the exchange rates, and that subsidy was not going to the ordinary person or manufacturers; it was going to rent seekers,” the minister said.
Of the N15.8tn in savings and additional resources mobilised for the federation, the Federal Government’s share amounted to N5.4tn, while N10.4tn accrued to states and local governments through the federation allocation system.
The minister also disclosed that the Federal Government generated an additional N3.1tn in independent revenue during the period, principally through increased remittances from government-owned entities.
He added that the government raised N11.9tn through incremental borrowing between June 2023 and December 2025.
Oyedele, however, argued that the borrowing would have been significantly higher without the fiscal space created by the reforms.
“The additional borrowing that the Federal Government took for that period of time, June 2023 to December 2025, amounted to N11.9tn,” he said, adding that the figure “would have been far higher and economically destabilising without the fiscal space the reforms created.”
Taken together, the minister said the Federal Government’s incremental resources from subsidy savings, additional independent revenue and borrowing amounted to N20.4tn during the period.
He stressed that the resources were not left idle but were used to finance increased government expenditure.
For the same period, Oyedele said, the Federal Government’s incremental expenditure stood at N30.64tn.
Of that amount, N9.39tn went towards wage adjustments, minimum wage increases and allowances for public servants.
“The incremental amount that the Federal Government spends paying higher wages is more than the entire savings that the Federal Government earns from subsidy removal,” he said.
Oyedele acknowledged that the reforms had imposed significant hardship on Nigerians, particularly through higher prices and the sharp adjustment in the value of the naira.
“Those decisions came at a real cost, and we are not here to pretend otherwise,” he said.
“Prices rose. The naira adjusted sharply. Households and businesses felt it, and many still do.”
He said the government’s objective with the scorecard was to present the full picture of the reforms, including both the costs borne by Nigerians and the economic problems the government believes the measures prevented.
“What we want to do today is put the whole picture in front of you, the Nigerian people: what those reforms cost, what they believe, and just as importantly, what they prevented,” Oyedele said.
The scorecard, according to the minister, contains four components: an account of how resources generated by the reforms were raised and spent; an assessment of 10 ways the reforms benefited average Nigerians and 10 harms they prevented; a scorecard containing 25 indicators comparing the economy’s actual performance with a counterfactual scenario; and an appendix containing the underlying figures and methodology.
Oyedele urged journalists, editors and independent analysts to examine the figures and methodology rather than simply accepting the government’s conclusions.
“The fourth is an appendix with the underlying figures, so that anyone, you, your editors, independent analysts can change our arithmetic and our methodology rather than simply take our word for it,” he said.
The Finance Ministry, he added, would make the materials available on its website to enable members of the public and analysts to download and scrutinise the data.
The minister said the government was presenting the scorecard as an attempt to assess the reforms honestly, regardless of whether Nigerians ultimately agreed with the policies.
(The Whistler)