How fuel subsidy removal, FX reforms saved Nigeria N15.8trn in 30 months — Oyedele

The federal government Wednesday said  the removal of fuel subsidy and unification of the foreign exchange market generated N15.8 trillion in savings for the Federation between June 2023 and December 2025.

The funds, it said, have translated into tangible relief for millions of Nigerians despite the pains of the reforms.

Minister of Finance and Coordinating Minister of the Economy, Prof. Taiwo Oyedele, disclosed this while unveiling what the ministry called “Nigeria’s Reform Scorecard.”

The document assesses the costs, benefits and harms averted by the administration of President Bola Ahmed Tinubu’s twin reforms.

Of the N15.8 trillion in subsidy savings, Oyedele said, N5.4 trillion accrued to the federal government while N10.4 trillion was shared among states and local governments.

He added that the federal government also earned N3.1 trillion in incremental independent revenue, mainly from remittances by government-owned entities, while N11.9 trillion came from borrowing.

“That money did not sit idle,” Oyedele said, noting that the federal government’s total incremental resources of N20.4 trillion helped fund N30.64 trillion in incremental expenses, with N9.39 trillion spent on wage adjustments and public servant allowances, N9.37 trillion on external debt service, and N6.5 trillion on strategic infrastructure.

He pointed out that wage adjustments alone outstripped the entire subsidy savings accruing to the federal government, an indication, he said, showed that the reforms were not introduced for revenue purposes but to tackle “entrenched corruption in an artificially managed fuel subsidy and foreign exchange market.”

Benefits of reforms

On how the reforms benefited ordinary Nigerians, Oyedele listed the prompt payment of salaries and pensions, the clearing of longstanding pension arrears, and an increase in the national minimum wage from N30,000 to N70,000.

He also cited the Nigerian Education Loan Fund (NELFUND), which he described as one of the most affordable student loan schemes globally, as having supported over 1.5 million students.

Other benefits, he said, include cash transfers to millions of households, subsidised mortgages, agricultural support aimed at strengthening food security, and a new Tax Act that exempts low-income earners and small businesses from taxation.

Prevented harms

Beyond the visible gains, the minister said the scorecard also captured harms the reforms had prevented.

He noted that while 27 states could not reliably pay salaries as of May 2023, that number has since dropped to zero, whereas the ministry’s projections suggest at least 30 states would have been unable to pay salaries by now without the reforms.

The minister also disclosed that the exchange rate premium between the official and parallel markets, once above 60 per cent, has narrowed to under 5 per cent, adding that without the reforms, the premium could have exceeded 150 per cent, leaving the naira “simply unavailable at any official rate for most Nigerians and businesses.”

He, however, was candid about the costs of the reforms, noting that  the Monetary Policy Rate had risen from 18.5 per cent to 26.5 per cent, while petrol prices have climbed from about N185 per litre to between N1,100 and N1,400. The minister maintained that without the reforms, petrol would likely be both scarce and trading above N3,000 per litre on the black market.

On inflation, Oyedele said the general price index eased to 15.91 per cent as of June 2026, down from 22.41 per cent in May 2023, while food inflation dropped from 24.82 per cent to 17.52 per cent within the same period. He, however, admitted that poverty and household welfare recovery remained “unfinished business.”

Other macroeconomic indicators

Citing other macroeconomic indicators, the minister said gross external reserves rose to $52.5 billion from about $35 billion, while net reserves grew from roughly $3 billion to $34.8 billion.

He added that the stock market’s capitalisation expanded from about N31 trillion to approximately N150 trillion, while real Gross Domestic Product (GDP) growth strengthened to 3.89 per cent from a baseline of 2.31 per cent.

Oyedele further disclosed that Nigeria’s sovereign credit rating was upgraded to ‘B’ by S&P Global in May, its first upgrade in fourteen years, alongside the country’s exit from the Financial Action Task Force (FATF) grey list in October 2025 and the European Union’s anti-money laundering watch list in January 2026.

Looking ahead, the minister said government would sustain the reform trajectory, deepen cash transfers, expand agricultural interventions to moderate food prices, and work with subnational governments to ensure that economic gains translate into felt relief across the 774 local government areas of the federation.

Idris speaks

In his opening remarks, Minister of information and National Orientation Mohammed Idris said proceeds from the removal of fuel subsidy were being redirected towards investments that can deliver greater and more sustainable value to the Nigerian people.

The minister noted that the decision to remove the fuel subsidy was undoubtedly one of the most significant and difficult economic reforms undertaken by this Tinubu administration.

“We recognise that it has required sacrifices and adjustments from individuals, families, businesses and communities across the country. But the Government has also been clear from the outset that resources previously committed to subsidising fuel consumption must be redirected towards investments that can deliver greater and more sustainable value to the Nigerian people,” he said.

On the purpose of the media parley, Idris said, “Today’s briefing is therefore an important part of keeping faith with Nigerians.

“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 reform are being translated into tangible improvements in their lives.

This is fundamentally about transparency and accountability. The conversation around subsidy removal cannot end with the policy decision itself. Nigerians deserve to know what the reform has achieved, the resources that have accrued from it, and how these resources are supporting the broader objectives of economic renewal, infrastructure development and improved public welfare.”

He added the Tinubu –led government remains committed to open and continuous engagement with Nigerians.

“Our responsibility is not merely to announce policies, but also to explain them, acknowledge the challenges associated with them, account for their outcomes, and demonstrate how difficult decisions taken today are laying the foundations for a stronger and more sustainable economy,” he said.