N15.8 Trillion Later: Why Nigerians Are Still Asking Where the Subsidy Savings Went

A big number, and a bigger question
The Nigerian government says the removal of the petrol subsidy and the liberalization of the naira generated N15.8 trillion (about $11.76 billion at the current official exchange rate of roughly N1,344/$1) in savings for the federation between June 2023 and December 2025.

Three years after President Bola Tinubu's May 2023 declaration that "subsidy is gone," the figure was formally unveiled by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, at a media conference on the government's reform scorecard, titled "The Benefits, Costs and Harm Prevented."

But as Daily Trust's front page captured it this week, the announcement has reopened a familiar question in communities across the country: what has the money actually done for ordinary Nigerians?

How the money was generated and shared
Oyedele explained that the N15.8 trillion did not arrive as a single line item labelled "subsidy savings" in the Federation Account. Instead, it showed up through higher revenue collections particularly increased customs duties and petroleum profit tax, boosted by the naira's devaluation, which raised the local currency value of dollar-denominated transactions.

Of the total, the Federal Government's share was N5.4 trillion ($4.02 billion), while N10.4 trillion ($7.74 billion) flowed to state and local governments through the statutory Federation Account Allocation Committee (FAAC) formula. The Federal Government separately generated N3.1 trillion ($2.31 billion) in incremental independent revenue, mainly from remittances by government-owned entities, and took on N11.9 trillion ($8.85 billion) in additional borrowing bringing its total incremental resources to N20.4 trillion ($15.18 billion) against N30.64 trillion ($22.80 billion) in incremental spending.

Where the federal share actually went
The breakdown of federal spending is where scrutiny has concentrated. Oyedele disclosed that N9.39 trillion ($6.99 billion) nearly twice the Federal Government's entire N5.4 trillion subsidy-savings share went to wage adjustments, minimum wage increases, and allowances for public servants. Debt servicing consumed N9.37 trillion ($6.97 billion), and N6.5 trillion ($4.84 billion) went into strategic infrastructure.

"The incremental amount that the Federal Government spent paying higher wages is more than the entire savings that the Federal Government earned from subsidy removal," Oyedele acknowledged. He argued the reforms nonetheless prevented a worse crisis, contending that without them, as many as 30 states could have struggled to pay salaries, and that petrol currently retailing between N1,100 and N1,400 per litre (roughly $0.82 to $1.04) could have hit roughly N3,000 per litre (about $2.23) on the black market had the old subsidy regime continued.

Economists push back on the "benefits" framing

Economic scholar Professor Ndubisi Nwokoma, quoted prominently on Daily Trust's front page, offered a sharply different reading. While acknowledging the reforms improved public finances and gave state governments more room to meet salary obligations, he argued the broader impact on households had been negative. Rising fuel prices pushed up transportation costs, which in turn drove up the prices of goods and services nationwide.

"The benefits are nothing because the poverty index increased because people were paying more," Nwokoma said, describing the situation as "pure mismanagement of the economy" and arguing the government had not shown sufficient prudence in managing the windfall.

Employers' body demands a state-by-state accounting

The Nigeria Employers' Consultative Association (NECA) has gone further, calling on state and local governments to publicly account for their N10.4 trillion ($7.74 billion) share of the savings. NECA Director-General Adewale-Smatt Oyerinde said state commissioners of finance now had an obligation to disclose how much their states received, what it was spent on, and what challenges were encountered arguing that the same standard of transparency expected of private businesses should apply to government at every tier, not just the centre.

A pattern that predates this disclosure
The tension between headline savings figures and lived economic reality is not new to Nigeria's subsidy story. Before removal, the country spent an estimated $84.39 billion on petrol subsidies between 2005 and 2022, with the subsidy bill surging roughly 700 percent in 2022 alone to reach nearly N4 trillion (about $2.98 billion at today's rate) spending successive governments said had become fiscally unsustainable.

The removal itself triggered pump prices to jump from roughly N197 (about $0.15) to as high as N617 per litre (about $0.46) within months in 2023, setting off transportation and food-price inflation that Nigerian households are still absorbing. The government's own National Orientation Agency has previously pointed to infrastructure gains citing 40 road projects funded from subsidy-related savings as evidence the reform is paying off in tangible terms, even as poverty and cost-of-living data tell a more contested story.

The unresolved question
What emerges from the latest disclosure is less a dispute over whether savings were generated most independent commentary accepts that they were than over whether the scale of relief delivered to ordinary Nigerians has matched the scale of the number attached to it.

With N9.39 trillion ($6.99 billion) of the federal share alone absorbed by wage adjustments and N9.37 trillion ($6.97 billion) by debt servicing, and with states now under pressure to show their own accounting, the N15.8 trillion ($11.76 billion) figure looks less like a closed chapter in Nigeria's reform story and more like the opening of a fresh audit one Nigerians, and now NECA, are explicitly demanding be made public.

Mustapha Bature Sallama medical Science communicator, Private Investigator, Criminal Investigation and Intelligence Analysis,United States Institute of Peace (USIP), mustysallama@gmail.com +233555275880

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