The Federal Government has explained how resources generated from the removal of petrol subsidy and foreign exchange reforms were distributed and spent between June 2023 and December 2025.

According to the Federal Ministry of Finance’s Nigeria Reform Scorecard presented on Wednesday, the reforms generated N15.8tn in subsidy savings for the Federation during the period.

However, the entire N15.8tn did not accrue to the Federal Government.

How was the N15.8tn shared?

The ministry’s presentation showed that the N15.8tn was distributed among the three tiers of government through the statutory allocation system.

The Federal Government received N5.4tn, representing 34 per cent of the amount.

States received N6.5tn, or 41 per cent, while local governments received N3.9tn, representing 24 per cent.

This means the Federal Government’s share of the N15.8tn was N5.4tn, while N10.4tn went to states and local governments.

Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, explained that the subsidy savings did not appear in the Federation Account as a separate item labelled “subsidy savings.”

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

He explained that the effect of the reforms was reflected through increased revenue collections.

“So, the subsidy savings showed up in the Federation accounts by way of higher revenue collections as a result of the reforms,” he said.

What happened to the Federal Government’s N5.4tn?

The ministry’s presentation showed that the N5.4tn subsidy savings was only part of the additional resources available to the Federal Government.

It recorded N3.1tn in other incremental revenue, mainly from remittances by government-owned entities.

The government also recorded N11.9tn in incremental borrowing.

Together, the N5.4tn subsidy savings, N3.1tn additional revenue and N11.9tn borrowing brought the Federal Government’s total incremental resources to N20.4tn.

Borrowing accounted for the largest share, at N11.9tn or 58 per cent. Subsidy savings accounted for N5.4tn, or 27 per cent, while other revenue contributed N3.1tn, or 15 per cent.

How was the money spent?

The ministry said total incremental expenses during the period amounted to N30.64tn.

The largest expenditure was wage adjustments, which accounted for N9.39tn. This covered the minimum wage, wage awards and allowances.

The second-largest category was external debt service, which amounted to N9.37tn, with the ministry attributing the increase to the impact of exchange rate depreciation.

Another N6.47tn went into strategic infrastructure development.

The government also spent N3.14tn on the incremental cost of electricity subsidy, while N1.24tn went into domestic debt service linked to the impact of monetary policy rate increases.

Other expenditures included N423.8bn for social welfare transfers, N419.1bn for FCT development, the Ecological Fund and natural resource investments, and N201.26bn in higher naira costs of foreign obligations.

Where did the remaining money come from?

The ministry’s figures show that the N30.64tn total incremental expenses were not funded entirely from the N20.4tn in incremental resources.

Of the spending, N20.404tn was funded from incremental resources, while N10.236tn came from the existing revenue base.

In other words, the N5.4tn Federal Government share of the subsidy savings was part of a wider pool of N20.4tn in incremental resources used to fund various government expenditures.

What does the government say the reforms achieved?

The ministry also presented a comparison between Nigeria’s current economic position and what it estimated could have happened without the reforms.

It said debt service-to-revenue had fallen from about 100 per cent in 2022 to a projected 50 per cent in 2026, while the number of states unable to pay salaries had fallen from 27 in 2023 to zero in 2026.

The ministry also reported higher foreign exchange reserves, improved capital importation, stronger GDP growth and increased oil production.

However, it acknowledged that household welfare remains a work in progress, with poverty still high and the cost of living having risen significantly following the reforms.

The government said its next priorities include reducing inflation, maintaining a unified exchange rate, lowering poverty, improving food security and ensuring that the macroeconomic gains translate into better living conditions for Nigerians.