The Federal Government has provided a breakdown of what happened to the ₦15.8tn in resources generated for the Federation from petrol subsidy removal and foreign exchange reforms between June 2023 and December 2025.
The figures, contained in the Federal Ministry of Finance’s Nigeria Reform Scorecard presented on Wednesday, clarify a key point that has often been misunderstood in the subsidy debate: the ₦15.8tn did not belong entirely to the Federal Government.
It was shared among the Federal Government, the 36 states and the 774 local governments through the statutory allocation system.
Here is how the money moved and how the Federal Government says its share was used.
How was the N15.8tn shared?
According to the ministry’s presentation, the ₦15.8tn generated during the period was distributed across the three tiers of government.
– Federal Government: ₦5.4tn — 34 per cent
– States: ₦6.5tn — 41 per cent
– Local governments: ₦3.9tn — 24 per cent
In effect, the Federal Government received ₦5.4tn, while states and local governments collectively received ₦10.4tn.
Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, explained that the money did not appear in the Federation Account as a separate line item marked “subsidy savings.”
“Between June 2023 and December 2025, subsidy savings mobilised a sum of ₦15.8tn in resources for the Federation,” Oyedele said.
According to him, the savings were reflected through increased revenue flowing into the Federation Account following the reforms.
“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 ₦5.4tn?
The ₦5.4tn was not the only additional resource available to the Federal Government during the period.
The ministry recorded another ₦3.1tn in incremental revenue, largely from remittances by government-owned entities.
The government also raised ₦11.9tn through incremental borrowing.
READ ALSO: Fuel Subsidy Removal Saved Nigeria ₦15.8tn In 30 Months — Oyedele
Combined, these three sources produced N20.4tn in incremental resources for the Federal Government.
The composition was:
– Borrowing: ₦11.9tn — 58 per cent
– Subsidy savings: ₦5.4tn — 27 per cent
– Other incremental revenue: ₦3.1tn — 15 per cent
This distinction is important. The ₦20.4tn was the Federal Government’s wider pool of additional resources; it was not the same thing as the ₦15.8tn generated for the entire Federation.
How did the Federal Government spend the money?
The government said its total incremental expenditure between June 2023 and December 2025 reached ₦30.64tn.
The largest expenditure was on workers.
₦9.39tn was spent on wage adjustments, including increases arising from the national minimum wage, wage awards and other allowances.
The second-largest item was external debt service, which consumed ₦9.37tn.
The ministry attributed the high cost partly to the depreciation of the naira, which increased the amount required in local currency to service dollar-denominated debt.
The government also spent:
– ₦6.47tn on strategic infrastructure development.
– ₦3.14tn on the incremental cost of electricity subsidy.
– ₦1.24tn on domestic debt service linked to higher monetary policy rates.
– ₦423.8bn on social welfare transfers.
– ₦419.1bn on FCT development, the Ecological Fund and natural resource investments.
– ₦201.26bn on the higher naira cost of foreign obligations.
Did the ₦20.4tn cover all the spending?
No.
This is another important part of the government’s explanation.
While the Federal Government recorded ₦20.404tn in incremental resources, its incremental expenses reached N30.64tn.
That leaves a difference of N10.236tn.
According to the ministry, that balance was funded from the government’s existing revenue base.
In simple terms, the government did not spend only the money it generated additionally through subsidy savings, extra revenue and borrowing. It combined those incremental resources with money from its existing revenue base to meet its obligations.
So, did the Federal Government spend the ₦5.4tn subsidy savings separately?
Not in the sense of putting ₦5.4tn into a dedicated account and then assigning specific expenditure items to it.
The government’s explanation is that the subsidy savings increased the revenue available through the Federation Account. The Federal Government then received its statutory share, which became part of its wider pool of resources.
Consequently, it would be inaccurate to say that a particular ₦9.39tn spent on wages, for example, came exclusively from subsidy savings.
Rather, the ₦5.4tn Federal Government share of the ₦15.8tn was one component of the ₦20.4tn in incremental resources used alongside existing revenues to finance government expenditure.
What did the government say the reforms achieved?
Beyond the financial figures, the Finance Ministry presented what it described as evidence of the broader benefits of the reforms.
It said the ratio of debt service to revenue had fallen from about 100 per cent in 2022 to a projected 50 per cent in 2026.
The ministry also reported that the number of states struggling to pay salaries had fallen from 27 in 2023 to zero in 2026.
Other improvements cited included higher foreign exchange reserves, increased capital importation, stronger GDP growth and increased oil production.
However, the government acknowledged that the economic reforms have not yet translated into sufficient improvements in household welfare.
Poverty remains high, while Nigerians have faced a substantial increase in the cost of living since the reforms began.
What happens next?
The Federal Government says its next phase of reforms will focus on bringing down inflation, maintaining a unified foreign exchange market, reducing poverty, strengthening food security and ensuring that improved macroeconomic indicators eventually translate into better living standards.
The figures therefore tell a more complicated story than simply asking where the petrol subsidy savings went.
Of the ₦15.8tn generated for the Federation, ₦5.4tn went to the Federal Government, ₦6.5tn went to states and ₦3.9tn went to local governments.
For the Federal Government, the ₦5.4tn was then absorbed into a much larger ₦20.4tn pool of incremental resources, which included ₦3.1tn in additional revenue and ₦11.9tn in borrowing.
Against this, the government recorded ₦30.64tn in incremental expenditure, with the largest allocations going to workers’ wages and allowances, external debt service and infrastructure.
The central issue, therefore, is no longer simply how much was saved from subsidy removal, but how effectively the additional resources and the broader reforms are ultimately converted into better economic conditions for Nigerians.