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.
