Where Has Subsidy Saving Gone? FG Finally Opens Up
- Finance Minister Taiwo Oyedele addressed questions about the fuel and FX subsidy savings at a public forum in Abuja on July 30, 2026
- Oyedele said the freed-up resources were absorbed by rising debt costs, the new minimum wage, and expanded social programmes including NELFUND
- The minister promised Nigerians a detailed breakdown of how the subsidy savings were spent, describing it as a transparency obligation
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Finance and Coordinating Minister of the Economy Taiwo Oyedele has broken down where the savings from Nigeria's fuel and foreign exchange subsidy removals have gone, acknowledging the question is valid and promising a public accounting soon.
Oyedele made the remarks at the 7th Africa Emerging Markets Forum in Abuja on July 30, 2026, responding to audience questions about the billions of naira freed up since the subsidies were scrapped.
Source: Twitter
He said:
"There was a question about the subsidy savings. Where has it gone to? I've heard this question so many times. And guess what? It's a valid question. So where has the money gone to? And 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."
How the subsidy savings were absorbed
Oyedele explained that removing both the petrol subsidy and the implicit foreign exchange subsidy together freed up resources equal to roughly 5% of GDP. He framed the reforms as primarily about correcting economic distortions rather than simply unlocking cash.
He said those resources were consumed by several concurrent pressures. Interest costs on government debt surged sharply, climbing from around 8% to as high as 24% on some borrowings. The government also had to finance spending that had previously been funded through Ways and Means advances, a form of central bank financing, which the administration stopped. Oyedele said halting money printing did not make the underlying spending disappear; it still had to be covered through legitimate channels.
The near-doubling of the federal minimum wage from ₦30,000 to ₦70,000 also drove up the government's wage bill significantly. Additionally, expanded social spending included the Nigerian Education Loan Fund (NELFUND), which he said has supported over 1.5 million students with tuition payments and stipends.
Short-term pain, long-term reset
Oyedele acknowledged that ordinary Nigerians are feeling the squeeze from the reforms and said the government would track progress through measures such as multidimensional poverty rates, real per-capita income, and inequality indicators rather than relying on headline GDP figures alone.
He said a detailed breakdown of how the subsidy savings were allocated would be published within days, describing it as part of the government's accountability to citizens.
See the video of the minister on X here:
Source: Legit.ng
