FG Pledged to Publish Detailed Breakdown of FX, Fuel Subsidy Savings

The Federal Government has pledged to publish a detailed account of how savings from the removal of fuel and foreign exchange subsidies have been utilised, amid growing public concerns over the impact of the reforms and persistent questions about where the funds have been spent.
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The Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, made the pledge on Thursday at the ongoing 7th Africa Emerging Markets Forum in Abuja after responding to concerns raised by the World Bank Group’s Chief Economist and Senior Vice-President for Development Economics, Indermit Gill, who said many Nigerians remained unconvinced that the gains from the reforms had translated into better living conditions.

Gill noted that while the government had increased revenues, reduced subsidies and narrowed the fiscal deficit, “it’s not clear to people whether savings and the additional resources have been spent,” urging the minister to explain how the reforms had improved the lives of Nigerians.

He also said the Central Bank of Nigeria had done “a superb job” reducing inflation from above 30 per cent to below 15 per cent but stressed that further progress would require stronger fiscal support from the government.

Responding, Oyedele acknowledged that questions over subsidy savings were justified and assured Nigerians that a detailed breakdown would be released within days.

“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,” he said.

According to him, the combined impact of removing fuel subsidies and what he described as the “subsidy on foreign exchange” amounted to about five per cent of Gross Domestic Product.

“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,” the minister said.

Oyedele said the reforms were primarily intended to eliminate economic distortions rather than generate fiscal savings, arguing that many Nigerians assessed the reforms without considering what the economy would have looked like had they not been implemented.

He explained that part of the savings had been absorbed by higher debt servicing costs following the rise in interest rates, the implementation of the new N70,000 minimum wage and expanded social programmes, including the Nigerian Education Loan Fund, which he said had provided tuition support and monthly stipends to more than 1.5 million students.

The minister also defended the government’s continued borrowing despite improved revenues, saying stronger revenue collection did not automatically eliminate financing needs where expenditure exceeded income.

On poverty, Oyedele disagreed with the World Bank’s narrative that the reforms had worsened living conditions, insisting that the increase in poverty reflected the inevitable consequences of correcting long-standing distortions.

“The reform itself was a reset. We were living in fiscal illusions. So, we needed to stop deceiving ourselves so the country can move forward,” he said, adding that the government was now focused on translating macroeconomic stability into productivity, decent jobs and shared prosperity.

He also disclosed that the Federal Government was developing a framework to reduce the cost of capital without introducing new subsidies, saying the initiative would complement the CBN’s inflation-fighting efforts while supporting investments in the real sector.

Also speaking at the forum, the Director of Statistics at the Central Bank of Nigeria, Dr Okpanachi Moses, said a new CBN study found that food price volatility and inflation reinforce each other across many Sub-Saharan African countries, limiting the effectiveness of conventional monetary policy in fragile economies.

Presenting findings from a study covering 36 countries, Moses said conflict-affected economies experienced weaker monetary policy transmission, with food price shocks passing more quickly into headline inflation. He added that Nigeria was classified among the region’s stable economies.

“What we found is, interestingly, a mutually reinforcing relationship between food price volatility and inflation persistence,” he said, explaining that because households in many African countries spend between 40 and 60 per cent of their income on food, food price shocks rapidly feed into overall inflation.

Taiwo Oyedele

He warned that central banks in conflict-affected countries should apply interest rate policies cautiously, arguing that restoring food systems and undertaking structural reforms were often more effective in containing inflation than relying solely on monetary tightening.

“Central banks in countries that are in conflict… must apply demand-side tools with caution. What is critical… is that there needs to be more investment towards restoring or stabilising the food system,” Moses said.

He added that policy frameworks should reflect country-specific conditions, noting that reforms remained essential to improving the effectiveness of monetary policy as countries, including Nigeria, strengthen their inflation-targeting frameworks.
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