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

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🇳🇬 Here's What Happened

The government, however, acknowledged that the subsidy savings did not appear in the Federation Account as a separate line item, explaining that the gains from the reforms manifested instead through increased revenue collections arising from changes in the exchange rate and the removal of subsidy-related distortions.

The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, disclosed this at a media conference on Nigeria’s reform scorecard, titled, “The Benefits, Costs and Harm Prevented.”

The disclosure provides a fresh government explanation to a question that has persisted since President Bola Tinubu announced the removal of petrol subsidy in May 2023: where did the savings go?

📌 Key Details

According to Oyedele, the N15.8tn was not paid into the Federation Account under a heading described as “subsidy savings.”

Instead, he said the combined effect of the petrol subsidy removal and foreign exchange reforms increased the naira value of revenues accruing to the Federation.

“Between June 2023 and December 2025, subsidy savings mobilised a sum of N15.8tn in resources for the Federation,” Oyedele said.

“Many people will say, ‘Where is the subsidy saving?’ As a matter of fact, there wasn’t any line in the Federation Account with the description, ‘subsidy savings.’

“So, the subsidy savings showed up in the form of higher collection by Customs because, for every one dollar of import duty before, at N460, it became one dollar at N1,004, N1,003, N1,005.

“The NRS, Petroleum Profit Tax that it collected before, same dollar, higher amount in naira. So, the savings showed up in the Federation accounts by way of higher revenue collections as a result of the reforms.”

📰 Source: Punch Nigeria

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