FG to publish detailed account of petrol subsidy savings, says Taiwo Oyedele
Taiwo Oyedele, minister of finance and coordinating minister of the economy, says the federal government will soon publish a detailed account of how savings from the removal of fuel subsidy and foreign exchange subsidies have been utilised.
Oyedele spoke on Wednesday at the seventh Africa Emerging Markets Forum in Abuja while responding to questions on whether Nigerians were seeing the benefits of the economic reforms introduced by the administration of President Bola Tinubu.
He acknowledged that many Nigerians have questioned what became of the savings from the subsidy removal, describing the concerns as legitimate.
“Where has the money gone? I’ve heard this question so many times. And guess what? It’s a valid question,” he said.
According to Oyedele, the government will, in the coming days, release a comprehensive breakdown of the savings and how they have been spent.
“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,” the minister said.
He said the combined cost of petrol subsidy and what he described as “subsidy on FX” amounted to about five percent of Nigeria’s gross domestic product (GDP), stressing that while eliminating the subsidy generated fiscal savings, the primary objective was to remove distortions and corruption embedded in the system.
“The money saving is also important,” the minister added.
Oyedele said a significant portion of the savings had gone into financing obligations that were previously funded through central bank financing, servicing higher debt costs following tighter monetary conditions, and implementing the new national minimum wage.
He added that before the reforms, government spending was partly financed through money creation, while interest payments on public debt were significantly lower.
“If you stop printing, the spending doesn’t disappear. You need to finance the money you were printing before. That was part of where the savings went,” the minister said.
Oyedele said the ministry of finance and the Central Bank of Nigeria (CBN) have strengthened policy coordination to ensure fiscal and monetary authorities work from the same economic assumptions before introducing new measures.
The minister said aligning assumptions on inflation and other macroeconomic indicators would prevent conflicting policy actions.
“If the central bank sees outlook for inflation to be on the upside, and the fiscal authorities think inflation will turn downwards, those are two assumptions that will drive policy actions,” Oyedele said.
“We said to ourselves, we will start with the assumptions. At least when we get convinced about what is driving the assumptions, we can adopt the same assumption and then go do our work independently.”
‘FG WORKING ON FRAMEWORK TO REDUCE BORROWING COSTS’
Oyedele acknowledged that high interest rates remain a constraint to business growth but said the finance ministry is developing a framework to lower financing costs without reintroducing subsidies.
“Within the Ministry of Finance, we are working on a framework on how to bring down the cost of capital without introducing subsidies,” the minister said.
“We believe we can complement the work of the monetary authorities and bring down the cost of capital.”
He also disagreed with the World Bank’s narrative that poverty had worsened because of the reforms.
While admitting that subsidy removal initially reduced real incomes, he said the reforms had laid the foundation for stronger income growth.
“This is one area where I tend to disagree with the narrative by the World Bank,” Oyedele said.
“Poverty has gone up because you cannot remove subsidy and people become richer. Reform itself was a reset.”
He said Nigeria recorded nearly 10 percent real per capita income growth in dollar terms in 2025 and expressed confidence that poverty levels would decline as growth becomes more inclusive.
The minister further said preliminary government analysis showed that the economic cost of excessive regulation, bureaucracy and policy inconsistency exceeds the country’s combined revenue from value-added tax (VAT), company income tax (CIT) and personal income tax (PIT).
“Our preliminary analysis shows that the cost of over-regulation, bureaucracy and policy inconsistency is more than the combined revenue that we generate from corporate income tax, personal income tax and VAT combined,” he said.
Oyedele added that removing administrative bottlenecks could unlock more economic value than introducing additional tax incentives.
“One thing that is better than incentives is removing disincentives, and that’s what we tend to prioritise.”
The minister said the federal government’s immediate economic priorities remain revenue optimisation, accelerating growth and maintaining fiscal discipline, adding that the ministry is also building a public data portal to improve transparency and reduce reliance on external sources for Nigerian economic data.
