Fuel Subsidy Removal Saved N15.8trn, But Debt Service Swallows 46% of Govt Revenue

ValidViewNetwork can report that Nigeria’s fuel subsidy removal and exchange rate unification mobilized N15.8 trillion for the three tiers of government between June 2023 and December 2025, according to a reform scorecard presented by the Finance Ministry.

Of this amount, N5.4 trillion accrued to the federal government, N6.5 trillion to the 36 states and N3.9 trillion to the 774 local governments.

The Debt Reality

ValidViewNetwork understands that the more revealing figure sits underneath that headline number.

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The federal government’s total incremental resources over the period stood at N20.4 trillion.

Of that amount, 58% came from borrowing, 27% from subsidy savings and 15% from other revenue.Incremental borrowing alone reached N11.9 trillion. By comparison, Abuja’s N5.4 trillion share of the subsidy savings was less than half the amount it raised through additional debt.

Where the Money Went

ValidviewNetwork has learned that wage adjustments and the new minimum wage absorbed N9.39 trillion, while external debt service took N9.37 trillion.

Wages and external debt service together consumed N18.76 trillion, roughly 92% of the federal government’s N20.4 trillion in incremental resources.

Each of those two spending lines, on its own, was also close to twice the N5.4 trillion federal share of the subsidy savings.

What This Means

ValidViewNetwork understands that Finance Minister Taiwo Oyedele framed the exercise less as a victory lap than as an accounting of what the reforms made possible, while acknowledging their costs.

Nigeria’s monetary policy rate has risen from 18.5% to 26.5%, while gasoline prices have climbed from about N185 a litre before subsidy removal to roughly N1,100-N1,400.

ValidViewNetwork notes that states and local governments received a combined N10.4 trillion, roughly two-thirds of the total subsidy-related resources; yet there is no equivalent public scorecard showing how those governments used the additional money.