Nigeria Saved N15tr From Petrol Subsidy Removal – Taiwo Oyedele

Nigeria saved N15.8 trillion from the removal of petrol subsidy between June 2023 and December 2025, Taiwo Oyedele, minister of finance and coordinating minister of the economy, has said.

Oyedele disclosed this on Wednesday during a media conference on the scorecard of the federal government’s reforms between 2023 and 2026.

According to him, the subsidy savings mobilised N15.8 trillion in resources for the federation within the period under review. “Between June 2023 and December 2025, subsidy savings mobilised the sum of N15.8 trillion in resources for the federation,” Oyedele said.

He explained that the federal government received N5.4 trillion of the amount, while N10.4 trillion was shared among state and local governments.

Oyedele added that the federal government generated N3.1 trillion in incremental independent revenue, mainly through remittances from government-owned entities.

He said the government’s total incremental
resources from subsidy savings, independent revenue and additional borrowing stood at N20.4 trillion.

“Altogether, the federal government’s incremental resources over the period — subsidy savings, independent revenue, and incremental borrowing — came to N20.4 trillion,” he said.

The minister said the federal government’s additional borrowing of N11.9 trillion would have been significantly higher without the fiscal space created by the reforms.

He, however, said the federal government recorded N30.64 trillion in incremental expenditure during the same period.

Of the amount, N9.39 trillion was spent on wage adjustments, minimum wage increases and allowances for public servants, while N9.37 trillion went towards external debt servicing.

Another N6.5 trillion, according to Oyedele, was spent on strategic infrastructure.

He said the rise in external debt-servicing costs was largely driven by the depreciation of the naira, noting that although the dollar value of the debt remained unchanged, more naira was required to meet the obligations.

“If we were paying $1 million before in interest on our foreign debt, it is still the same $1 million, but instead of N460, it’s now N1,415,” he said.

“That’s more naira that we need to incur. And I’ve said this before, when you have debt service to pay, you don’t negotiate, you don’t delay, you pay. Because delay or defaults have consequences.”

Oyedele also said expenditure on higher wages exceeded the federal government’s entire share of the savings from subsidy removal.

“The incremental amount that the federal government spends paying higher wages is more than the entire savings that the federal government earned from subsidy removal,” he said.

According to the minister, the reforms were not primarily introduced to increase government revenue but to tackle what he described as entrenched corruption in Nigeria’s fuel subsidy and foreign exchange markets.

SOURCE: THEGUARDIAN