Subsidy removal, FX reforms yielded N15.8tn in 30 months – FG

Nigeria's Federal Government revealed on Wednesday that the removal of petrol subsidies and the unification of the foreign exchange market generated an additional N15.8tn for the Federation between June 2023 and December 2025. The gains were primarily received by states and local governments. However, the government acknowledged that the subsidy savings were not recorded separately in the Federation Account, stating that the benefits were reflected in increased revenue collections resulting from changes in the exchange rate and the elimination of subsidy-related distortions.

At a media conference, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, explained that the N15.8tn was not deposited under a line item designated as "subsidy savings" in the Federation Account. Instead, the combined impact of the petrol subsidy removal and foreign exchange reforms led to a higher value of revenues accruing to the Federation.

Oyedele attributed the increased revenues to the improvement in the naira's value following the removal of the subsidy, as well as the petroleum profit tax collected on a larger dollar amount. He emphasized that the additional fiscal resources were generated by both the petrol subsidy removal and the foreign exchange reforms, which ended the implicit subsidy that had created opportunities for rent-seeking.