The Federal Government has explained how it shared N15.8 trillion in savings from fuel subsidy removal over the past three years.

Finance Minister Taiwo Oyedele gave the figures at a press conference on Wednesday. He explained how the subsidy reform affected government finances and the Federation Account.

According to Oyedele, the government saved N15.8 trillion after removing the fuel subsidy. The Federal Government, states and local governments shared the funds.

The Federal Government received N5.43 trillion from the savings. State governments received N6.52 trillion, while local governments received N3.88 trillion.

Oyedele said the savings did not create one large cash reserve for the Federal Government. Instead, the reform reduced the cost of maintaining the fuel subsidy.

Government Records Additional Revenue

The finance minister also disclosed other financial gains from the reforms.

The government generated N3.12 trillion in additional revenue during the period. It also recorded N11.85 trillion in additional borrowing.

Together, these sources gave the Federal Government about N20.4 trillion in additional resources.

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However, government spending also increased during the same period. Oyedele said the Federal Government spent about N30.64 trillion on additional expenditures.

The figures show that subsidy removal did not leave the government with a large surplus. Instead, the reform helped reduce the pressure on government finances.

Oyedele said the government would have needed more borrowing without the savings from subsidy removal.

Where the Government Spent the Money

The government directed the additional spending towards several areas.

Wage adjustments accounted for N9.39 trillion. The government also spent N9.37 trillion on external debt servicing.

Infrastructure received N6.47 trillion during the period. The government also spent N3.14 trillion on electricity subsidies.

These figures show the scale of the demands on Nigeria’s public finances. The government must fund wages, debt payments, infrastructure and other public services at the same time.

Impact on Housing and Infrastructure

The figures also matter to Nigeria’s housing and construction sectors.

Government revenue plays an important role in infrastructure development. Roads, electricity, water supply and other public services support housing projects and urban growth.

Higher public spending on infrastructure can improve access to new housing areas. It can also support the growth of real estate markets when better roads and public services connect new developments to major cities.

However, rising costs remain a major concern for the construction industry. Higher energy, transport and material costs can increase the cost of building homes.

Developers also face higher financing costs when interest rates and other economic pressures rise. These factors can make affordable housing more difficult for many Nigerians to access.

Tinubu’s Economic Reforms

President Bola Ahmed Tinubu announced the removal of the petrol subsidy in May 2023. His administration also liberalised the foreign exchange market in June 2023.

Both reforms changed the cost of fuel and the value of the naira. Petrol prices rose sharply after the subsidy ended, while the naira experienced major fluctuations.

The reforms have since affected households, businesses and government finances.

The latest figures provide more detail on the financial impact of the subsidy decision. They also show how the government has used additional resources while managing rising spending needs.

For Nigeria’s housing and infrastructure sectors, the allocation of public funds remains important. Government investment can support infrastructure that makes housing development possible.

At the same time, the government must balance infrastructure needs with debt payments, wages and other financial obligations.

The N15.8 trillion breakdown therefore offers a clearer picture of the fiscal impact of fuel subsidy removal. It also highlights the financial pressures facing the government as it funds infrastructure and other public needs.

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The Federal Government has indicated that cooling inflation in Nigeria could pave the way for lower debt servicing costs, as Finance Minister and Coordinating Minister of the Economy, Wale Edun, signaled the possibility of future interest rate reductions. The remarks came during the Abu Dhabi Sustainability Week, where Edun highlighted the potential fiscal benefits of moderating inflation trends for the 2026 federal budget.

Speaking to journalists, Minister Edun commended the Central Bank of Nigeria (CBN) for its efforts in stabilizing the economy, noting that the apex bank’s monetary tightening measures had successfully curbed inflationary pressures that reached record highs in late 2024.

“With inflation gradually declining, there is now an opportunity to reduce borrowing costs, which will ease the fiscal burden of debt servicing and provide the government more room to implement developmental priorities,” Edun said.

Monetary Tightening and Fiscal Relief

The CBN had previously raised the Monetary Policy Rate (MPR) aggressively to contain soaring prices, peaking at a historic high. Following the moderation in inflation, the bank cut the MPR by 50 basis points in September 2025, bringing it to 27%. Minister Edun noted that further reductions could follow if inflation continues its downward trajectory, signaling potential relief for both government finances and private sector borrowers.

Lower interest rates would reduce the proportion of federal revenue allocated to debt obligations, which currently accounts for over 25% of the proposed 2026 budget, amounting to approximately ₦15 trillion out of a total ₦58 trillion spending plan. The budget deficit is projected at roughly ₦24 trillion, underscoring the significance of any reduction in borrowing costs.

Structural Reforms and Revenue Mobilisation

In addition to potential monetary easing, the federal government is strengthening fiscal discipline and revenue mobilisation. Ministries, Departments, and Agencies (MDAs) have been instructed to fully migrate to automated payment platforms, reducing cash leakages and enhancing transparency.

Other funding initiatives for 2026 include:

• Privatisation proceeds from the sale of state-owned assets.
• NNPC divestments, focusing on strategic sales to boost foreign exchange inflows.
• Production increases in crude oil to stabilize revenues.
• Outlook for Investors and Policymakers

Finance Minister Edun’s remarks indicate a potential shift from crisis management to sustainable fiscal policy, leveraging lower inflation to ease debt costs and support economic growth. Policymakers and investors will monitor inflation trends, debt service ratios, and revenue mobilisation efforts, as these factors will directly impact Nigeria’s financial stability in 2026.

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