Taiwo Oyedele, Minister of Finance and Coordinating Minister of the Economy, has given a breakdown of how the Bola Ahmed Tinubu administration utilised savings realised from two key policies – the removal of the petrol subsidy and the unification of foreign exchange rates – which stood at N15.8 trillion.
He disclosed the figure on Wednesday at a press briefing in Abuja where he outlined the fiscal impact of reforms introduced by President Tinubu.
He explained that the subsidy savings were largely responsible for stability in the fiscal space, with states now able to meet their obligations to staff and contractors unhindered, in contrast to the previous situation where several states relied on loans to meet basic salary and other commitments.
The scorecard session at the Federal Ministry of Finance headquarters was attended by some ministers and heads of departments, including the Minister of Budget and National Planning, Alhaji Atiku Bagudu, and the Minister of Information and National Orientation, Mohammed Idris, on the day campaigns for the January 16, 2027 presidential election opened.
A breakdown indicated that states and councils received about N10.4 trillion, while the Federal Government got N5.4 trillion from the subsidy savings.
Oyedele, who presented the government’s three-year economic reform scorecard, said the reforms helped to stabilise the economy, deepen nationwide sub-national development and reset the Nigerian economy for sustainable growth.
He noted that the benefits and potential damage avoided since the administration began its major economic changes outweighed the possible crises that would have ensued without the government’s courageous reforms.
He pointed out that while the reforms were not designed simply to increase government revenue, they produced the twin positive effects of increasing revenue and ending endemic corruption that had been draining the country.
According to him, the reforms created additional fiscal space by improving the flow of oil and non-oil revenue into the Federation Account and reducing the financial obligations that would otherwise have been carried into the future.
He highlighted that savings from the removal of the petrol subsidy formed part of a wider increase in government resources at a time the country was dealing with severe fiscal pressures.
He noted that the government also generated N3.1 trillion in additional independent revenue, mainly from remittances by government-owned entities, while raising N11.9 trillion through additional borrowing.
The incremental resources of N20.4 trillion during the period supported an expanded expenditure profile, with the government spending N30.64 trillion on additional expenses over the same period, with the largest portions going to public-sector wages, debt servicing and infrastructure.
He outlined that N9.39 trillion was spent on wage adjustments, minimum wage increases and allowances for public servants, while N9.37 trillion went into servicing external debt following the impact of exchange-rate depreciation. A total of N6.5 trillion was spent on strategic infrastructure.
He stated that borrowing accounted for 58 per cent of the N20.4 trillion in incremental resources, while subsidy savings contributed 27 per cent and other revenue accounted for the remaining 15 per cent.
He added that two-thirds of the N30.64 trillion in additional expenditure was financed from these new resources, while about N10 trillion came from the existing revenue base.
Oyedele said this expansionary fiscal drive was achieved while the government stopped relying on excessive Ways and Means financing from the Central Bank of Nigeria (CBN).
While acknowledging the negative effects of high interest rates and increases in petrol prices, Oyedele pointed out that maintaining the old policies would have produced even more serious problems.
Oyedele said without the reforms, Nigerians could have ended up with a worse scenario of an endless spiral into high prices, mounting debts and macroeconomic instability.
(Ripples)