The Chairman of the Federal Roads Maintenance Agency (FERMA) Board, Dr Musa Babayo, has backed President Bola Tinubu’s decision to remove the petrol subsidy, describing the policy as a step in the right direction.
Babayo, however, urged Nigerians to shift greater attention to state governors and local government chairmen and demand explanations for how they have spent the additional revenues accruing to the sub-national governments following the reform.
In a statement issued on Thursday, titled “The Other Side of Subsidy Reform: Where Did the Money Go? Nigeria’s States and Local Governments Received Trillions More. Citizens Must Now Demand an Account”, Babayo said the subsidy reform had significantly increased the resources available to states and local councils.
He cautioned against attributing all the economic difficulties facing Nigerians to the removal of the subsidy, arguing that such a narrative failed to take account of the substantial increase in revenue received by the other tiers of government.
Babayo, who previously chaired the Board of Trustees of the Tertiary Education Trust Fund (TETFund), said citizens should ask their governors how much their respective states had received through increased Federation Account revenues since the reform and how the additional funds had been utilised.
He said Nigerians should demand details of spending on critical sectors, including infrastructure, healthcare, education, agriculture, water supply, rural roads, employment generation and social protection.
Citizens, he added, should also seek information on projects completed with the funds, their locations and the amounts spent on them.
Babayo said the same standard of accountability should apply to local governments, stressing that publishing allocations from the Federation Account Allocation Committee (FAAC) should not mark the end of public scrutiny.
“The real accountability question begins after the money reaches the state and local government accounts,” he said.
He called on civil society organisations, professional associations, traditional institutions, the media and political leaders to intensify demands for transparency and accountability at the sub-national level.
“There is nothing subversive about citizens asking their state government to account for public money in their custody. Indeed, it is one of the most fundamental obligations of democratic citizenship,” Babayo said.
He urged governors and local government leaders not to interpret legitimate questions about public spending as political hostility.
Similarly, he said citizens should not be discouraged from demanding accountability because the political leaders in their states or councils belonged to parties they supported.
Babayo acknowledged that the removal of the petrol subsidy had brought immediate economic pressures, including higher transport fares, rising food prices, reduced household purchasing power and a wider cost-of-living crisis.
He nevertheless argued that the debate over the reform should also consider the additional resources made available to the three tiers of government.
“The removal of the subsidy did not simply eliminate an expenditure from the Federal Government’s books. It released substantial resources into the Federation Account, from which states and local governments also benefited,” he said.
Citing figures from the Federal Ministry of Finance, Babayo said approximately N15.8 trillion in subsidy savings accrued to the Federation between June 2023 and December 2025.
He said state governments received about N6.52 trillion, representing roughly 41 per cent of the amount, while local governments received approximately N3.88 trillion, or about 24 per cent. The Federal Government, he said, received about N5.43 trillion.
Babayo said the central issue was whether the additional resources generated by the reform, alongside the higher allocations subsequently received by states and local governments, had resulted in tangible improvements in the lives of citizens.
“If the purpose of reform is ultimately to create a more productive, prosperous and resilient economy, then additional public resources should produce additional public value,” he said.
He further cited an estimate by the Federal Ministry of Finance that, compared with the monthly revenue pattern before the subsidy removal, state governments received about N9.17 trillion in additional allocations between June 2023 and December 2025.
Local governments, he said, received approximately N6.66 trillion in additional allocations over the same period.
According to Babayo, the impact of economic reforms cannot be determined solely by actions taken by the Federal Government because many services that directly affect citizens are largely dependent on state and local authorities.
He identified primary healthcare, basic education, rural infrastructure, markets, water supply, agricultural support and local economic development among the areas where sub-national governments play a significant role.
“Consequently, the effectiveness of economic reform will ultimately be judged not merely by what Abuja saves, but by what the entire federation does with the resources made available by those reforms,” he said.
Babayo called for stronger mechanisms to track expenditure by state and local governments.
He urged every state government to regularly publish simple and accessible reports detailing the additional revenue received as a result of the reforms and explaining how the money was spent.
Such measures, he said, would help move the national conversation beyond the immediate hardship associated with economic reforms towards the broader question of whether the resources generated by those reforms were being properly accounted for and effectively deployed.
