…Says Fuel Subsidy Regime Would Have Pushed Nigeria Into Bankruptcy
…Lists Socioeconomic Benefits Of Ongoing Reforms
The Minister of Finance and Coordinating Minister of the Economy, Prof. Taiwo Oyedele, on Wednesday described the ongoing reforms by the President Bola Tinubu-led administration as having its gains and pains, admitting that despite the positive scorecard of the initiative, poverty and household welfare drive remains an unfinished business, not a victory lap.
The minister, who admitted this challenge in the socioeconomic transformation agenda of the Federal Government in his remarks during a media briefing on the performance of the economic reforms with the theme ‘Nigeria’s Reform Scorecard: The Benefits, Costs And Harms Prevented’ held in Abuja, maintained that based on critical assessment parameters, the reforms, particularly the fuel subsidy removal, had saved Nigeria from bankruptcy and strongly positioning the economy on the path of sustainable growth in the years ahead.
According to him, President Tinubu about three years ago embarked on major reforms to address age-long economic challenges, including the removal of a fuel subsidy that was quietly bankrupting the country, and the unification of an exchange rate system that had become a source of arbitrage, distortion and corruption rather than stability.
Oyedele explained that those decisions came at a real cost with prices rising and the naira adjusting sharply such that households and businesses felt the impacts and many still do.
Giving a scorecard of the reforms based on 25 assessment indicators, the minister said that between June 2023 and December 2025, subsidy savings mobilised for the federation totalled N15.8 trillion and that out of the savings N5.4 trillion accrued to the Federal Government, while N10.4 trillion was shared to states and local governments.
In addition, he clarified that the Federal Government earned incremental independent revenue of N3.1 trillion – principally remittances from government-owned entities while N11.9 trillion came from incremental borrowing, a figure that would have been far higher, and economically destabilising, without the fiscal space the reforms created.
Oyedele explained that cumulatively, the Federal Government’s incremental resources over the period came to N20.4 trillion which was used to partly funded incremental expenses of N30.64 trillion.
He disclosed that out of the revenue accruals, the Federal Government spent N9.39 trillion went to wage adjustments, minimum wage increases and allowances for public servants; N9.37 trillion on external debt service made necessary by exchange rate depreciation; and N6.5 trillion went into strategic infrastructure – making the top three expenditure lines, adding that every naira of this is accounted for.
Further clarifying the revenue and expenditure figures, the minister explained that of the N20.4 trillion, 58 percent came from borrowing, 27 percent from subsidy savings, and 15 percent from other revenue. Against total incremental spending of N30.64 trillion, two-thirds was funded by these new resources, while the remaining third – about N10 trillion – came from the existing revenue base, despite ending the excessive printing of naira.
Oyedele pointed out that that, in itself, represented evidence of improved public financial management and it was instructive to note that the single largest expenditure line – wage adjustments, at N9.39 trillion – outstripped the Federal Government’s entire savings from subsidy removal; and that the reform was never introduced for revenue purposes, but to address entrenched corruption in an artificially managed fuel subsidy and foreign exchange market.
The minister, who spoke elaborately on the methodology adopted by the government in its fiscal management strategies, maintained that behind these figures were real, tangible changes in people’s lives as salaries and pensions were paid on time, and longstanding pension arrears for retirees were fully settled.
He clarified: “A minimum wage more than doubled, from N30,000 to N70,000. NELFUND, now one of the most affordable student loan schemes globally, helping over 1.5 million students through school. In addition, there are cash transfers to millions of households, subsidised mortgages, 3 agricultural support strengthening food security, and a new Tax Act that exempts low-income earners and small businesses from tax, while simplifying a system that had over-burdened the poor for decades.
On what the reforms prevented, he explained that in May 2023, 27 states could not reliably pay salaries but that today, no subnational government is facing the challenge of salary and pension payments.
Oyedele said: On the pre-reform trajectory, our own estimate is that at least thirty states would be in that position by now – that’s not a handful, but the majority of the federation. The official exchange rate premium over the parallel market, once above 60 percent, is now under 5 percent; left unaddressed, we project it would be above 150 percent, with the naira simply unavailable at any official rate for most Nigerians and businesses. And the legacy Ways and Means stock, which stood at N30 trillion, has been curtailed rather than left to double, as our estimates suggest it would have”, he added.
Noting that the positive scorecard of the reforms has not been without some pains, the minister maintained that “a scorecard that only lists wins is not a scorecard – it is a campaign leaflet, and we did not come here to give you one. The Monetary Policy Rate has risen from 18.5 percent to 26.5 percent; we record that plainly as the cost of stabilisation, not a hidden win. Petrol at the pump has risen from roughly N185 a litre to between N1,100 and N1,400. That is a major, felt cost, and I will not stand here and tell you otherwise.
“What I will say is what the counterfactual shows: on the pre-reform path, petrol would likely be simultaneously unavailable at the old official price and trading above N3,000 on the black market – a worse cost, paid in scarcity as well as money, with nothing gained in return. And on food and household welfare, our own assessment is candid: this remains work in progress. Food inflation has eased from 24.82 percent to 17.52 percent as at June 2026, but poverty and household welfare recovery is still classified in our own scorecard as unfinished business, not a victory lap”, he added.
The minister, who spoke on where the economy stands today in terms of micro and macroeconomic indicators, disclosed that the results of the reforms were now visible in the data, not just in our arguments as the nation’s headline inflation eased to 15.91 percent as of June this year, down from 22.41 percent at our May 2023 baseline while the gross foreign reserves stood at $52.5 billion, up from around $35 billion, while net reserves had moved from roughly $3 billion to $34.8 billion – a far more meaningful measure of our actual buffer.
On investment, he reported that the stock market had grown from about N31 trillion to roughly N150 trillion in capitalization just as the real GDP growth had strengthened to 3.89 percent, against a baseline of 2.31 percent and a no-reform estimate that had us at best stagnant and at worst in recession.
Oyedele recalled that S&P Global upgraded Nigeria’s sovereign credit rating to ‘B’ in May – being the first upgrade in 14 years just as Nigeria exited the FATF grey list in October last year, and exited the European Union’s Anti-Money Laundering and Combating the Financing of Terrorism Deficiency List in January 2026, restoring the nation’s improved standing in the global financial system.
He said that despite the positive ratings, none of these meant the work had finished, or that every household had been moved to where it needed to be but that it meant that the direction the government had been following through the reforms remain right, and the numbers – costs included – had been backing the measures up.
Looking Ahead, the minister said: “This scorecard is a mid-course account, not the finish line. So let me share with you what comes next. We will stay the course of reform, and accelerate how we translate the macro gains into meaningful impact for every household. Implementation of the Nigeria Tax Act will continue, with further fiscal reforms addressing challenges in our budgeting, reporting and accountability systems.
“We expect the tax-to-GDP ratio to keep climbing as the harmonised system takes hold. On prices, our goal over the medium term is to keep pushing headline inflation toward single digits, without ever going back to the distortionary subsidies that got us into this position in the first place.
“On investment, we intend to keep the exchange rate unified and predictable, because predictability, more than any single incentive package, is what is now drawing capital back into our country. We will improve the quality and priority of spending in the most impactful areas.
“And on the areas this scorecard honestly marks as unfinished business – poverty and household welfare chief among them – the next phase of our work is squarely about translating macroeconomic stability into relief that households actually feel: expanding cash transfers to the most vulnerable, deepening agricultural interventions to bring food prices down further, and working with states and local governments to ensure that shared prosperity is delivered from Abuja to every state and every ward in all 774 local government councils”, he assured.
Oyedele, in his closing remarks gav a three-point charge to journalists, namely that first a journalist should be a citizen – support positive government policies. We cannot build our country by opposing every government action; second, should criticise government constructively; misinformation, like anything else we amplify, shapes the reality we all end up living in; and third, play his or her part by seeking facts and proper understanding, not populist views or sensational headlines.
He concluded: “We are not here to pretend these reforms were painless. We are here to show you, honestly and with the numbers, what they cost, the benefits they delivered, and the harm they prevented”