Tinubu’s reform scorecard: More money, same old priorities

The Nigerian Ministry's Reform Scorecard for the period between June 2023 and December 2025 reveals a significant increase in federal government revenue, totaling N20.4 trillion. This growth stemmed from fuel subsidy savings (N5.4 trillion), revenues from government-owned entities (N3.1 trillion), and fresh borrowing (N11.9 trillion). Notably, states and local governments received a more substantial portion of the subsidy savings, totaling N10.4 trillion, compared to the Federal Government's N5.4 trillion.

The bulk of the Federal Government's incremental spending (N30.64 trillion) was directed towards raising minimum wages and allowances for public servants (N9.39 trillion), surpassing the entire federal share of subsidy savings. External debt service due to naira depreciation accounted for N9.37 trillion, while strategic infrastructure projects received N6.5 trillion.

Despite the substantial fiscal space created by subsidy removal, social welfare transfers were comparatively modest at N424 billion, with only N223.8 billion allocated to the NELFUND student loan scheme. In percentage terms, social welfare accounted for approximately 2.1% of the Federal Government's incremental resources. Education, funded primarily through the NELFUND, received an even smaller share of just 1.1%.

Critics argue that this allocation raises questions about prioritization. Developing nations like Nigeria, grappling with high levels of out-of-school children, allocate nearly forty times more funds to public-sector wages than to education support during periods of fiscal reform. Education and health are not secondary to salaries and debt management; they are crucial foundations for future productivity.

Contrastingly, Brazil, when it discovered significant pre-salt oil reserves, allocated 75% of royalties from new contracts to education and 25% to health through Law 12.858 of 2013. This strategy aimed to convert a finite natural resource into permanent human capital. Nigeria, facing similar resource constraints and a larger youth population, took an alternative approach.

Additionally, the Reform Scorecard does not adequately account for the proceeds of subsidy removal or ringfence these savings for specific purposes. In the past, Nigeria utilized dedicated mechanisms like the Petroleum Trust Fund (PTF) to ensure transparency and trackable outcomes. Ring-fencing and sharing these funds with states under clear guidelines would have provided citizens with a clearer understanding of the money's allocation.

Another gap in the Scorecard concerns the treatment of NNPC's ongoing energy costs. In 2024 alone, NNPC recorded N7.13 trillion in "energy security expenses," up from N4.8 trillion in 2023. This amount, covering under-recovery from the difference between actual import costs and regulated pump prices, was charged against Federation remittances.

These off-balance-sheet obligations effectively represent a continuation of subsidy in another form and are not fully reflected in the official Reform Scorecard. Excluding these costs presents an incomplete picture of the true fiscal impact of energy pricing policies.