FG borrows N11.9 trillion in two years, says subsidy removal prevented more debt

Between June 2023 and December 2025, the Federal Government borrowed N11.9 trillion, but claims that the figure would have been significantly higher had it not pursued economic reforms. Minister of Finance, Taiwo Oyedele, revealed these details while presenting the government's reforms scorecard. Oyedele explained that the N11.9 trillion in additional borrowing enabled the government to fund its expenditure during this period, but argued that the reforms had prevented borrowing from becoming more destabilizing.

He emphasized that the resources generated through the reforms were not idle, but partially used to finance increased government expenditure. The subsidy savings between June 2023 and December 2025 amounted to N15.8 trillion, which helped mobilize resources for the Federation. These savings were a result of the removal of petrol subsidies and the liberalization of the foreign exchange market.

The N15.8 trillion in resources mobilized for the Federation was distributed as N5.4 trillion to the Federal Government, N10.4 trillion to states and local governments, and an additional N3.1 trillion in independent revenue generated by the Federal Government. The removal of fuel subsidies by President Bola Tinubu on May 29, 2023, was aimed at reducing fiscal pressures and redirecting resources towards productive sectors of the economy.

However, the fiscal gains from the subsidy removal have been claimed to have been absorbed by debt servicing, leaving the government with limited capacity to fund development projects and deliver social interventions. Analysts have warned that the redirection of subsidy savings to debt servicing has neutralized the intended fiscal relief and raised concerns about the sustainability of the government's current fiscal strategy.