The Federal Government has explained how N15.8tn subsidy savings generated from petrol subsidy removal and foreign exchange reforms were distributed and spent between June 2023 and December 2025, with Finance Minister and Coordinating Minister of the Economy Taiwo Oyedele saying the money was shared through the Federation Account.
The figures were contained in the Federal Ministry of Finance’s Nigeria Reform Scorecard presented on Wednesday, August 19, 2026.
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According to the ministry, the reforms generated N15.8tn in additional resources for the Federation during the 30-month period. The full amount, however, did not go to the Federal Government.
States received the largest share at N6.5tn, representing 41 per cent, while the Federal Government received N5.4tn, or 34 per cent. Local governments received N3.9tn, accounting for 24 per cent.
Oyedele stressed that the savings did not appear as a separate line item labelled subsidy savings in the Federation Account.
“Between June 2023 and December 2025, subsidy savings mobilised a sum of N15.8tn in resources for the Federation,” Oyedele said.
He explained that the reforms increased government revenue, meaning the financial impact appeared through higher collections rather than as a distinct pool of cash.
“So, the subsidy savings showed up in the Federation accounts by way of higher revenue collections as a result of the reforms,” he said.
For the Federal Government, the N5.4tn share formed part of a broader pool of N20.4tn in incremental resources.
The ministry recorded another N3.1tn in additional revenue, largely attributed to remittances from government-owned entities. It also raised N11.9tn through additional borrowing.
Borrowing therefore accounted for 58 per cent of the Federal Government’s incremental resources, compared with 27 per cent from its share of subsidy savings and 15 per cent from other additional revenue.
The government said the combined resources were deployed alongside existing revenues to meet rising expenditure requirements.
Total incremental expenditure during the period stood at N30.64tn. The largest allocation, N9.39tn, went towards wage adjustments, including the minimum wage, wage awards and allowances.
External debt servicing accounted for another N9.37tn. The ministry attributed the increased naira cost partly to exchange rate depreciation.
Strategic infrastructure development received N6.47tn, while N3.14tn was spent on the additional cost of electricity subsidies.
A further N1.24tn went towards domestic debt servicing linked to higher monetary policy rates.
Other spending included N423.8bn on social welfare transfers, N419.1bn on FCT development, the Ecological Fund and natural resource investments, and N201.26bn on higher naira costs associated with foreign obligations.
The figures also show that the Federal Government’s N20.4tn in incremental resources did not cover the full N30.64tn in additional expenditure.
The ministry said N20.404tn of the spending was financed from incremental resources, while the remaining N10.236tn came from the existing revenue base.
The explanation provides important context to the debate over what happened to the savings generated by the removal of petrol subsidy.
Rather than being held separately for specific projects, the resources entered the broader public finance system and were distributed through existing government allocation mechanisms.
The government also presented evidence it said showed that the reforms were beginning to produce broader economic gains.
It reported that debt service-to-revenue had fallen from about 100 per cent in 2022 to a projected 50 per cent in 2026.
The number of states struggling to pay salaries, according to the ministry, also fell from 27 in 2023 to zero in 2026.
The scorecard further pointed to stronger foreign exchange reserves, increased capital importation, improved GDP growth and higher oil production as indicators of progress.
However, the ministry acknowledged that the economic adjustment has come with significant pressure on households.
Poverty remains high, while the cost of living has risen sharply since the reforms were introduced.
The government therefore faces the more difficult task of ensuring that improvements in public finances eventually translate into better living conditions.
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The next phase of the reform programme, according to the ministry, will focus on reducing inflation, maintaining a unified foreign exchange market, lowering poverty, improving food security and ensuring that the gains from economic reforms are more widely felt by Nigerians.
David Okere is a journalist and contributor to Freelanews.com, covering business, governance, public affairs, and human-interest stories with a commitment to accuracy, balance, and public interest reporting.
