Subsidy Removal: FG Saves N15.8trn, Generates N20.4trn

The Federal Government saved N15.8 trillion from the removal of petrol subsidy between June 2023 and December 2025, the Minister of Finance and Coordinating Minister for the Economy, Taiwo Oyedele, has disclosed.

Oyedele made the disclosure on Wednesday in Abuja during a media briefing on the scorecard of the Federal Government’s reforms between 2023 and 2026.

According to him, the Federal Government received N5.4 trillion from the subsidy savings, while N10.4 trillion was shared among state and local governments.

The minister also disclosed that the government generated N3.1 trillion in incremental independent revenue, largely through remittances from Federal Government entities.

He said the government’s total incremental resources from subsidy savings, independent revenue and additional borrowing amounted to N20.4 trillion, while incremental expenditure stood at N30.64 trillion during the period.

Oyedele said N9.39 trillion was spent on wage adjustments, minimum wage increases and allowances for public servants, while N9.37 trillion was used for servicing external debt.

He attributed the increase in external debt-servicing costs largely to the depreciation of the naira, stressing that although the dollar value of the debt remained unchanged, the government now required more naira to meet its 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.”

The minister further revealed that expenditure on higher wages exceeded the Federal Government’s entire share of savings from the petrol 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.

Oyedele said the Federal Government’s additional borrowing stood at N11.9 trillion during the period, but noted that the figure would have been significantly higher without the fiscal space created by the reforms.

He said the reforms had therefore provided additional resources to support government expenditure despite rising wage and debt-servicing obligations.