Subsidy, FX reforms generate ₦15.8tn in two yrs – Oyedele

By Onu Okorie

Federal Government’s removal of the petrol subsidy and reforms to the foreign exchange market generated an additional ₦15.8 trillion in resources for the Federation between June 2023 and December 2025, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has disclosed.
Oyedele made the disclosure on Wednesday in Abuja while presenting the government’s reform scorecard, titled “Nigeria’s Reform Scorecard: Benefits, Costs & Harms Prevention,” at a media conference organised by the Federal Ministry of Finance.
According to the minister, ₦5.4 trillion of the additional resources accrued to the Federal Government, while ₦10.4 trillion went to states and local governments through the Federation Account.
He said the government also generated an additional ₦3.1 trillion in independent revenue during the period, while incremental borrowing amounted to ₦11.9 trillion, bringing total incremental resources available to the government to about ₦20.4 trillion.
Oyedele acknowledged that the removal of fuel subsidy and unification of the foreign exchange market had imposed significant costs on Nigerians but argued that the measures created fiscal space and prevented potentially more severe economic dislocation.
He said the scorecard was not intended as a “victory lap” but as an assessment of what the reforms had cost, delivered and prevented.
“We invited you here today not to declare a victory, but to give an account,” he said. “What we want to do today is put the whole picture in front of you, the Nigerian people—what those reforms cost, what they delivered, and just as importantly, what they prevented.”
The minister said the additional resources were deployed alongside existing revenues to meet critical government obligations, including wage adjustments, external debt servicing and infrastructure development.
The scorecard reported ₦30.64 trillion in incremental Federal Government expenditure during the period. Of this amount, ₦9.39 trillion was spent on wage adjustments, minimum wage increases and allowances for public servants, while ₦9.37 trillion went towards external debt servicing. Another ₦6.5 trillion was committed to strategic infrastructure.
“The incremental amount that the Federal Government spent paying higher wages is more than the entire savings that the Federal Government earned from subsidy removal,” Oyedele said, arguing that the figures demonstrated improved public financial management rather than an attempt to introduce the reforms solely to raise revenue.
The scorecard assessed 25 economic indicators across five broad areas: fiscal sustainability, external stability, investment climate, social impact, and growth and productivity.
It compared Nigeria’s economic position in May 2023 with the latest available data and a projected “no-reform” scenario, which the government said was intended to show what could have happened if the previous subsidy regime, multiple exchange rates and heavy reliance on deficit financing had continued.
On social welfare, the government highlighted improvements in states’ capacity to meet salary and pension obligations, the increase in the national minimum wage from ₦30,000 to ₦70,000, student loans benefiting more than 1.5 million students, cash transfers to vulnerable households, subsidised mortgages and agricultural interventions.
The government also cited improvements in key macroeconomic indicators. It said headline inflation had declined to 15.91 per cent from a May 2023 baseline of 22.41 per cent, while food inflation had also eased.
Gross foreign reserves were put at $52.5 billion, while net reserves reportedly increased from about $3 billion to $34.8 billion.
The Nigerian stock market’s capitalisation, according to the scorecard, rose from approximately ₦31 trillion to ₦150 trillion, while real GDP growth strengthened to 3.89 per cent from a baseline of 2.31 per cent.
The government also cited Nigeria’s reported exit from international financial monitoring and compliance lists and an upgrade of the country’s sovereign credit rating by S&P Global as signs of improved investor confidence.
Despite the improvements, Oyedele admitted that stronger macroeconomic indicators had not yet translated sufficiently into better living conditions for all Nigerians.
“On food and household welfare, our assessment is candid. This remains work in progress,” he said. “Poverty and household welfare recovery is still classified in our own scorecard as unfinished business, not a victory lap.”
He said the next phase of the reform programme would focus on translating macroeconomic stability into tangible relief for households through stronger social protection, agricultural interventions and more effective public spending.
The government also warned of the potential consequences of maintaining the previous economic trajectory, including severe foreign exchange shortages, difficulties sustaining fuel imports and widespread salary arrears.
Oyedele said the premium between the parallel-market and official exchange rates, which was previously above 60 per cent, had fallen to below five per cent. Without the reforms, he said, the premium could have exceeded 150 per cent.
He also painted a scenario in which petrol would remain officially priced at the old subsidised rate but become largely unavailable, forcing consumers into a black market where prices could rise to as much as ₦3,000 per litre.
“It will still be 185 naira per liter. It will not be available at the official price. And it’s likely to be trading in the black market for at least 3,000 naira per liter,” he said, describing such scarcity as an additional cost “with nothing gained in return.”
Looking ahead, the Federal Government said it would maintain the reform trajectory while intensifying efforts to improve accountability, fiscal management, tax administration, investment predictability and household welfare.
It said its medium-term objective was to bring inflation towards single digits without returning to what it described as the “distortionary subsidy” regime, while maintaining a unified and predictable foreign exchange market.
The government also plans to expand cash transfers to vulnerable Nigerians, deepen agricultural interventions aimed at reducing food prices and work with state and local governments to ensure that the benefits of economic growth reach communities across the country.
Oyedele urged Nigerians to engage constructively with the reform process and independently examine the data underpinning the scorecard.
“We are not here to pretend these reforms were painless. We are here to show you honestly, and with the numbers, what it cost, the benefit they delivered, and the harm that they prevented,” he said.
Earlier, the Minister of Information and National Orientation, Mohammed Idris, said the briefing was convened to provide Nigerians with factual information on the savings and resources generated by the removal of the fuel subsidy.
Idris described the subsidy removal as one of the most significant and difficult economic decisions taken by the administration, acknowledging the sacrifices it had imposed on households, businesses and communities.
“Citizens have a right to know the financial implications of major economic decisions taken on their behalf. They have a right to know what resources have been freed up, what these resources mean for the federation, and how the benefits of these reforms are being translated into tangible improvements in their lives,” he said.
The minister stressed that transparency and accountability were essential to sustaining public confidence in the reform programme, adding that government’s responsibility extended beyond announcing policies to explaining them and accounting for their outcomes.
He urged the media to report government policies accurately while continuing to exercise its constitutional responsibility to scrutinise and criticise the administration.
“As the fourth estate of the realm, you have the great responsibility to critique government policies and programs. But in doing so, we must remember as always that we have a nation to keep,” Idris said.
He added that the media had a critical role to play in promoting national cohesion while holding public officials accountable.
“It is not about tearing down, it is about building our nation,” he said.