President Bola Tinubu-led administration, on Wednesday, finally unveiled a breakdown of the N15.8 trillion in savings from fuel subsidy removal and gains of other reforms over the last three years.
Minister of Finance, Taiwo Oyedele, disclosed this at a press conference, where he gave a detailed breakdown of the administration’s subsidy removal reforms.
Oyedele said the reforms resulted in N15.8 trillion in savings that accrued to the Federation Account.
The Minister noted that the savings from fuel subsidy removal were shared among the Federal Government, states and local governments.
He added that the Federal Government received N5.43 trillion, while the states received N6.52 trillion and local governments received N3.88 trillion from the fuel subsidy removal savings.
According to Oyedele, the reforms also generated N3.12 trillion in other incremental revenues and N11.85 trillion in incremental borrowing.
Consequently, the Federal Government had approximately N20.4 trillion in incremental resources during the period under review.
But he noted that additional expenditures incurred by the government during the same period amounted to approximately N30.64 trillion.
Oyedele said, “The Federal Government had approximately N20.4 trillion in incremental resources.
“Over the same period, additional expenditures amounted to approximately N30.64 trillion. Subsidy removal therefore did not create one large pool of cash available to the Federal Government. It reduced a major fiscal burden and the amount of additional borrowing that would otherwise have been required.”
The Minister added that of the N30.64 trillion in expenditures, N9.39 trillion was spent on wage adjustments, N9.37 trillion on external debt servicing, N6.47 trillion on infrastructure, and N3.14 trillion on electricity subsidies.
Recall that in May and June 2023, President Tinubu announced the removal of fuel subsidy and the liberalisation of the naira, which led to significant increases in fuel prices and fluctuations in the value of the naira.
