The Federal Government has promised to publicly account for how funds saved from the removal of fuel and foreign exchange subsidies have been spent, acknowledging that Nigerians deserve clarity on one of the country’s most debated economic reforms.
The Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, made the commitment on Thursday, July 30, during the 7th Africa Emerging Markets Forum in Abuja.
His assurance came after the World Bank Group’s Chief Economist and Senior Vice-President for Development Economics, Indermit Gill, questioned whether Nigerians had seen tangible benefits from the reforms.
Gill observed that although the government had increased revenue, reduced subsidies and narrowed the fiscal deficit, many citizens were yet to understand how the additional resources had been utilised.
“It’s not clear to people whether savings and the additional resources have been spent,” Gill said, urging the government to explain how the reforms had translated into improved living standards.
He also praised the Central Bank of Nigeria for its efforts in tackling inflation.
“The Central Bank of Nigeria has done a superb job,” Gill said, noting that inflation had fallen from above 30 per cent to below 15 per cent. However, he added that sustaining the progress would require stronger fiscal support from the government.
Responding, Oyedele admitted that public concerns over subsidy savings were legitimate and said the government would soon provide a detailed explanation.
“There was a question about the subsidy savings. Where has it gone to? I’ve heard this question so many times. And guess what? It’s a valid question,” he said.
According to the minister, eliminating fuel subsidies and what he described as the “subsidy on foreign exchange” generated savings equivalent to about five per cent of Nigeria’s Gross Domestic Product.
“So where has the money gone to? And in a few days, you will see the detailed analysis, because we believe that we owe a duty to explain what we do to the Nigerian people. That’s what transparency looks like,” Oyedele said.
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He argued that the reforms were introduced primarily to eliminate deep-rooted distortions in the economy rather than simply generate fiscal savings.
Oyedele said many critics assessed the reforms without considering what the country’s finances would have looked like if the subsidies had remained in place.
He explained that a significant portion of the savings had been absorbed by increased debt servicing costs caused by higher interest rates, implementation of the new ₦70,000 minimum wage, and expanded government social intervention programmes.
Among the programmes he highlighted was the Nigerian Education Loan Fund (NELFUND), which he said had already provided tuition support and monthly stipends to more than 1.5 million students.
The minister also defended the government’s continued borrowing despite improved revenue generation, saying higher income did not automatically eliminate the need for loans where expenditure still exceeded available resources.
“If you have a budget to spend 10 and you have a target of revenue of six, you need to borrow four. If you collect revenue of seven, you have exceeded your revenue target… But it doesn’t change the fact that you still need to borrow three,” he explained.
He maintained that borrowing remained appropriate as long as it financed projects capable of generating returns greater than their costs.
Addressing concerns over rising poverty, Oyedele rejected suggestions that the reforms had directly worsened living conditions, insisting they merely exposed economic realities that had long been hidden by unsustainable government spending.
“The reform itself was a reset. We were living in fiscal illusions. So, we needed to stop deceiving ourselves so the country can move forward,” he said.
He added that the government’s next priority was to convert recent macroeconomic gains into higher productivity, more employment opportunities and broader prosperity.
Oyedele also disclosed that the government was designing a framework to lower the cost of capital without reintroducing subsidies, saying the initiative would complement the Central Bank’s efforts to curb inflation while encouraging investment in productive sectors.