The Federal Government yesterday highlighted the several benefits that have accrued to the nation through the economic reforms introduced by President Bola Ahmed Tinubu.
The savings realised from two key policies – the removal of the petrol subsidy and the unification of foreign exchange rates – stood at N15.8 trillion.
The subsidy savings were largely responsible for stability in the fiscal space, with states now able to meet their obligations to staff and contractors unhindered, in contrast to the previous situation where several states relied on loans to meet basic salary and other commitments...READ THE FULL ARTICLE HERE .
The scorecard session at the Federal Ministry of Finance headquarters was attended by some ministers and heads of departments, including the Minister of Budget and National Planning, Alhaji Atiku Bagudu, and the Minister of Information and National Orientation, Mohammed Idris, on the day campaigns for the January 16, 2027 presidential election opened.
A breakdown indicated that states and councils received about N10.4 trillion, while the Federal Government got N5.4 trillion from the subsidy savings.
Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, who presented the government’s three-year economic reform scorecard yesterday in Abuja, said the reforms helped to stabilise the economy, deepen nationwide sub-national development and reset the Nigerian economy for sustainable growth.
He noted that the benefits and potential damage avoided since the administration began its major economic changes outweighed the possible crises that would have ensued without the government’s courageous reforms.
He pointed out that while the reforms were not designed simply to increase government revenue, they produced the twin positive effects of increasing revenue and ending endemic corruption that had been draining the country.
According to him, the reforms created additional fiscal space by improving the flow of oil and non-oil revenue into the Federation Account and reducing the financial obligations that would otherwise have been carried into the future.
He highlighted that savings from the removal of the petrol subsidy formed part of a wider increase in government resources at a time when the country was dealing with severe fiscal pressures.
He noted that the government also generated N3.1 trillion in additional independent revenue, mainly from remittances by government-owned entities, while raising N11.9 trillion through additional borrowing.
The incremental resources of N20.4 trillion during the period supported an expanded expenditure profile, with the government spending N30.64 trillion on additional expenses over the same period, with the largest portions going to public-sector wages, debt servicing and infrastructure.
He outlined that N9.39 trillion was spent on wage adjustments, minimum wage increases and allowances for public servants, while N9.37 trillion went into servicing external debt following the impact of exchange-rate depreciation. A total of N6.5 trillion was spent on strategic infrastructure.
He stated that borrowing accounted for 58 per cent of the N20.4 trillion in incremental resources, while subsidy savings contributed 27 per cent and other revenue accounted for the remaining 15 per cent.
He added that two-thirds of the N30.64 trillion in additional expenditure was financed from these new resources, while about N10 trillion came from the existing revenue base.
Oyedele said this expansionary fiscal drive was achieved while the government stopped relying on excessive Ways and Means financing from the Central Bank of Nigeria (CBN).
While acknowledging the negative effects of high interest rates and increases in petrol prices, Oyedele pointed out that maintaining the old policies would have produced even more serious problems.
As pain points of the reforms, the Monetary Policy Rate (MPR), the benchmark interest rate, increased from 18.5 per cent in May 2023 to 26.5 per cent, while petrol prices moved from approximately N185 per litre to between N1,100 and N1,400 per litre.
Oyedele said without the reforms, Nigerians could have ended up with a worse scenario of an endless spiral into high prices, mounting debts and macroeconomic instability.
He said petrol, which had been marked by perennial scarcity, could have become difficult to obtain at the former official price while selling for more than N3,000 per litre on the black market, while the difference between official and parallel-market exchange rates could have risen above 150 per cent, compared with less than five per cent currently.
He described the increase in interest rates and petrol prices as costs of economic stabilisation that should not be hidden from the public, but must be properly situated within the context of the past and what could have happened without the reforms.
According to him, exchange-rate reform has reduced one of the major distortions that previously encouraged arbitrage and made it difficult for businesses and individuals to access foreign exchange through the official market.
Oyedele pointed out that 27 states were unable to reliably pay salaries in May 2023, noting that without the reform, at least 30 states could have been struggling to meet salary obligations by 2026.
He added that the legacy Ways and Means balance, which stood at about N30 trillion, had also been reduced instead of being allowed to rise sharply.
He highlighted other benefits of the reforms
The Nigeria Education Loan Fund (NELFUND), introduced by the Tinubu administration, has provided support to more than 1.5 million students, while cash transfers, subsidised mortgages and agricultural interventions have been introduced to support vulnerable households and strengthen food security.
