The Federal Government has disclosed how the N15.8 trillion saved from fuel subsidy removal and other reforms was distributed over the past three years.
Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, made the disclosure on Wednesday during a press conference, where he provided details of the financial impact of the reforms introduced by the administration of President Bola Ahmed Tinubu.
Oyedele said the removal of the fuel subsidy resulted in N15.8 trillion in savings that accrued to the Federation Account and were shared among the three tiers of government.
According to him, the Federal Government received N5.43 trillion, states received N6.52 trillion, while local governments received N3.88 trillion from the savings.
The minister further disclosed that the reforms generated N3.12 trillion in additional revenue and N11.85 trillion in incremental borrowing.
He said these resources brought the Federal Government’s total incremental resources to approximately N20.4 trillion during the period under review.
However, Oyedele explained that the government’s additional expenditures during the same period stood at approximately N30.64 trillion.
“The Federal Government had approximately N20.4 trillion in incremental resources.
“Over the same period, additional expenditures amounted to approximately N30.64 trillion. Subsidy removal therefore did not create one large pool of cash available to the Federal Government. It reduced a major fiscal burden and the amount of additional borrowing that would otherwise have been required,” he said.
Breaking down the expenditure, Oyedele said N9.39 trillion was spent on wage adjustments, N9.37 trillion on external debt servicing, N6.47 trillion on infrastructure, and N3.14 trillion on electricity subsidies.
President Tinubu announced the removal of the petrol subsidy in May 2023, followed by the liberalisation of the foreign exchange market. The policies triggered a sharp increase in fuel prices and significant fluctuations in the value of the naira.
The government has consistently defended the reforms as necessary measures to reduce fiscal pressure and redirect public resources towards other areas of the economy.
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