Finance Minister says ₦5.4tn went to the Federal Government while states and LGs received ₦10.4tn; wages, debt servicing and infrastructure accounted for major spending….
Nigeria’s removal of petrol subsidy generated ₦15.8 trillion in resources for the Federation between June 2023 and December 2025, Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, has disclosed.
Oyedele made the disclosure on Wednesday while presenting the scorecard of the Federal Government’s economic reforms between 2023 and 2026.
According to him, the financial gains from the subsidy reform were reflected in increased revenue collections, particularly after the foreign exchange reforms increased the naira value of dollar-denominated transactions.
“Between June 2023 and December 2025, subsidy savings mobilised the sum of N15.8 trillion in resources for the federation,” the minister said.
Of the amount, the Federal Government received ₦5.4 trillion, while ₦10.4 trillion was distributed among state and local governments through the Federation’s revenue-sharing system.
Oyedele said the Federal Government also generated ₦3.1 trillion in incremental independent revenue during the period.
He attributed much of the increase to higher remittances from government-owned entities.
When the subsidy savings, additional independent revenue and new borrowing were combined, the Federal Government’s incremental resources reached ₦20.4 trillion, according to the minister.
The government, however, continued to borrow during the period, taking on an additional ₦11.9 trillion in borrowing.
Oyedele argued that the borrowing requirement would have been substantially greater without the fiscal space created by the reforms.
He said the additional borrowing would otherwise have been “far higher and economically destabilising.”
Despite the additional resources, the Federal Government’s incremental expenditure stood at ₦30.64 trillion between June 2023 and December 2025.
A significant portion went towards addressing the increased cost of personnel and meeting obligations arising from the country’s economic adjustment.
Oyedele said ₦9.39 trillion was spent on wage adjustments, minimum wage increases and allowances for public servants.
Another ₦9.37 trillion went towards servicing external debt, while approximately ₦6.5 trillion was allocated to strategic infrastructure projects.
The minister noted that spending on higher wages alone surpassed the Federal Government’s entire share of the resources generated through 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.
Naira depreciation increases cost of foreign debt
Oyedele also explained why the government’s external debt-servicing costs have risen significantly despite the dollar value of the debt remaining unchanged.
He attributed much of the increase to the depreciation of the naira following the foreign exchange reforms.
According to the minister, a dollar-denominated debt obligation that previously required considerably fewer naira now costs the government substantially more in local currency.
“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.
He stressed that debt obligations cannot simply be postponed when government finances come under pressure.
“When you have debt service to pay, you don’t negotiate, you don’t delay, you pay,” Oyedele said, warning that delays or defaults could carry serious economic consequences.
The minister said the figures should not be viewed simply as evidence that the government embarked on the reforms to increase revenue.
Rather, he argued that the central objective was to tackle what the administration considers longstanding structural problems in Nigeria’s economy.
According to Oyedele, the reforms were designed to address what he described as “entrenched corruption” associated with the artificially managed petrol subsidy and foreign exchange markets.
The removal of the petrol subsidy and the overhaul of the foreign exchange system have nevertheless had significant consequences for Nigerians, including higher transportation, energy and living costs.
The government has maintained that the immediate difficulties are part of the adjustment required to establish a more sustainable fiscal system, while insisting that the additional resources created by the reforms can ultimately be channelled towards wages, infrastructure and other public priorities.
