30 months after subsidy removal, FG spends N30.6tn, saves N15.8tn

In the past 30 months since President Bola Tinubu abolished petrol subsidies and enacted other significant economic reforms, the Federal Government has incurred N30.64tn in government expenditure to mitigate the impact of these policies, while simultaneously generating N15.8tn in savings. This resulted in an incremental expenditure of N30.64tn, surpassing the N20.4tn additional resources available from subsidy savings, increased revenue, and borrowing by N10.24tn or 50.2 percent.

The surplus funds were allocated to wage costs, debt servicing, infrastructure spending, and other obligations stemming from the economic reforms. Despite the creation of substantial fiscal space, the government found itself spending approximately N150 for every N100 in additional resources, leaving roughly one-third of the expenditure to be covered by existing revenue.

Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, revealed that the removal of petrol subsidies and the unification of the foreign exchange market yielded N15.8tn in additional resources for the Federation over the stipulated period. However, only N5.4tn, or 34 percent of the subsidy savings, was allocated to the Federal Government, with the remaining funds distributed among states and local governments according to the Federation Account allocation formula.

The release of the Nigeria Reform Scorecard, titled "The Benefits, Costs and Harm Prevented," aimed to provide a clear and factual overview of the savings resulting from the removal of the petrol subsidy and the unification of the foreign exchange market.