The Federal Government has released a detailed breakdown of how savings from petrol subsidy removal and foreign exchange reforms were shared and spent, shedding light on the fate of N15.8tn mobilised between June 2023 and December 2025.

According to the Federal Ministry of Finance’s Nigeria Reform Scorecard, the N15.8tn did not accrue solely to the centre. It was treated as part of overall revenue and distributed through the regular Federation Account allocation system to the three tiers of government.

From the total, the Federal Government received N5.4tn, or 34 per cent. States took the largest share with N6.5tn, representing 41 per cent, while local governments received N3.9tn, or 24 per cent. In effect, N10.4tn of the subsidy savings went to subnational governments.

Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, explained that the savings did not appear as a distinct line item labelled subsidy savings. Instead, they were reflected as higher revenue collections following the reforms, which ended the costly petrol subsidy regime and liberalised the foreign exchange market.

For the Federal Government, the N5.4tn share of subsidy savings formed only part of a larger pool of additional resources. The ministry reported N3.1tn in other incremental revenue, mainly from improved remittances by government-owned enterprises, and N11.9tn in incremental borrowing.

Combined, these three streams yielded N20.4tn in incremental resources for the Federal Government. Borrowing accounted for 58 per cent (N11.9tn), subsidy savings 27 per cent (N5.4tn), and other revenue 15 per cent (N3.1tn).

On the spending side, total incremental expenses for the period reached N30.64tn, exceeding the new resources and forcing reliance on the existing revenue base. Of this spending, N20.404tn was covered by the incremental resources, while N10.236tn came from previously available revenues.

Wage-related costs were the single largest item at N9.39tn, covering minimum wage adjustments, wage awards and allowances. External debt service followed closely at N9.37tn, driven largely by exchange rate depreciation. Strategic infrastructure projects absorbed N6.47tn.

The government also spent N3.14tn on additional electricity subsidy costs and N1.24tn on higher domestic debt service linked to rising interest rates. Other outlays included N423.8bn for social welfare transfers, N419.1bn for Federal Capital Territory development, the Ecological Fund and natural resource projects, and N201.26bn to cover higher naira costs of foreign obligations.

Presenting the figures, the ministry argued that the reforms have eased pressure on public finances, cutting the debt service-to-revenue ratio from about 100 per cent in 2022 to a projected 50 per cent in 2026 and eliminating salary arrears in state governments. However, it acknowledged that many households are yet to feel the benefits, with inflation, food prices and poverty still uncomfortably high.

The government’s stated priorities now include taming inflation, stabilising the exchange rate, boosting food security and ensuring that the fiscal gains from subsidy removal translate into tangible improvements in living standards.