The Federal Government has disclosed how the N15.8 trillion saved from fuel subsidy removal over the past three years was distributed among the three tiers of government.
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, made the disclosure at a press conference on Wednesday while providing details of the financial impact of the reforms introduced by the President Bola Tinubu administration.
According to Oyedele, the reforms generated N15.8 trillion in savings that accrued to the Federation Account.
He explained that the savings were shared among the Federal Government, states and local governments, with the Federal Government receiving N5.43 trillion, states N6.52 trillion and local governments N3.88 trillion.
The minister also disclosed that the reforms generated N3.12 trillion in additional revenue, while the government recorded N11.85 trillion in incremental borrowing.
These, he said, brought the Federal Government’s incremental resources to approximately N20.4 trillion during the period under review.
However, Oyedele noted that the government incurred additional expenditures of about N30.64 trillion over the same period.
“The Federal Government had approximately N20.4 trillion in incremental resources.
“Over the same period, additional expenditures amounted to approximately N30.64 trillion. Subsidy removal therefore did not create one large pool of cash available to the Federal Government. It reduced a major fiscal burden and the amount of additional borrowing that would otherwise have been required,” he said.
Giving a breakdown of the additional expenditure, Oyedele said N9.39 trillion was spent on wage adjustments, while N9.37 trillion went towards external debt servicing.
He added that N6.47 trillion was spent on infrastructure, while N3.14 trillion was allocated to electricity subsidies.
The disclosure comes about three years after President Tinubu announced the removal of the petrol subsidy in May 2023, followed by the liberalisation of the foreign exchange market.
The policies triggered significant increases in petrol prices and major fluctuations in the value of the naira, while the government maintained that the reforms were necessary to reduce fiscal pressures and improve the country’s economic outlook.
