The Federal Government has said the removal of the petrol subsidy and the liberalisation of the naira generated a combined N15.8 trillion in savings for the Federation between June 2023 and December 2025.
The government disclosed this while highlighting the fiscal impact of some of the major economic reforms introduced under President Bola Tinubu’s administration.
According to the Federal Government, the savings represent resources that would otherwise have been absorbed by fuel subsidy payments and foreign-exchange market distortions.
The petrol subsidy was removed in June 2023, shortly after President Tinubu assumed office, in one of the most significant economic policy decisions of the administration.
The government subsequently moved to reform the foreign-exchange market, allowing the naira to trade more freely and reducing the level of direct intervention used to maintain previous exchange-rate arrangements.
Officials have consistently argued that both reforms were necessary to address longstanding fiscal pressures and place the Nigerian economy on a more sustainable footing.
Before the subsidy was removed, the Federal Government spent substantial resources keeping petrol prices below market levels. The policy had been criticised for placing a heavy burden on government finances while disproportionately benefiting consumers across income groups.
However, the removal of the subsidy resulted in a sharp increase in petrol prices and significantly raised transportation and living costs for households.
Similarly, the liberalisation of the foreign-exchange market initially contributed to a significant depreciation of the naira against major international currencies.
The weaker currency increased the cost of imported goods, machinery and raw materials, contributing to inflationary pressures and worsening the cost-of-living crisis faced by many Nigerians.
The Federal Government has nevertheless maintained that the short-term pain associated with the reforms was necessary to correct structural weaknesses in the economy.
The reported N15.8 trillion in savings is therefore being presented by the government as evidence that the reforms have created additional fiscal space for the Federation.
Officials argue that the resources can be redirected towards infrastructure, social programmes, security, healthcare, education and other development priorities.
The government has also pointed to improved revenue generation and increased allocations to the three tiers of government as some of the benefits associated with the reforms.
However, the claim is likely to attract scrutiny from economists, opposition politicians and civil society organisations, particularly over how the savings have been calculated and how the resources have been utilised.
Critics of the reforms have repeatedly argued that fiscal savings should translate into tangible improvements in the living standards of Nigerians.
For millions of households, the period following subsidy removal has been characterised by significantly higher petrol prices, transportation costs, food prices and other essential expenses.
The naira’s depreciation has also increased the cost of imported products, placing additional pressure on businesses and consumers.
The government has responded by introducing various interventions intended to cushion the impact of the reforms, including social investment programmes, support for states and local governments, and measures aimed at improving domestic production.
The administration has also argued that stabilising the foreign-exchange market and reducing fiscal distortions will create the conditions for long-term economic growth.
The reported N15.8 trillion savings therefore form part of the government’s broader argument that the reforms are beginning to produce structural benefits despite the difficult adjustment period.
The challenge, however, remains converting fiscal savings into measurable improvements in citizens’ welfare.
As Nigeria continues to grapple with inflation, unemployment and high living costs, public attention is likely to focus increasingly on how the additional resources generated by the reforms are being spent.
The Federal Government’s claim represents a significant figure in the country’s ongoing economic reform debate.
Whether the N15.8 trillion in reported savings ultimately translates into stronger public finances, improved infrastructure and better living conditions will remain a key measure of the success of the reforms introduced since June 2023.
