Explainer: Where N15.8tn subsidy savings went

Nigeria's government has detailed the allocation of N15.8 trillion generated from the removal of petrol subsidies and foreign exchange reforms between June 2023 and December 2025. The Ministry of Finance's Nigeria Reform Scorecard revealed that this sum was distributed across the three tiers of government.

The Federal Government received N5.4 trillion, constituting 34% of the total savings. States collectively received N6.5 trillion (41%), while local governments obtained N3.9 trillion (24%). This distribution means that while the Federal Government's direct share was N5.4 trillion, states and local governments benefited from a combined N10.4 trillion.

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Between June 2023 and December 2025, subsidy savings mobilised a sum of N15.8tn in resources for the Federation.

Finance Minister Taiwo Oyedele clarified that the "subsidy savings" did not appear as a distinct line item in the Federation Account. Instead, the reforms led to higher overall revenue collections, which reflected these savings. The Federal Government's N5.4 trillion share from these savings was supplemented by N3.1 trillion in incremental revenue, primarily from government-owned entities, and N11.9 trillion in incremental borrowing.

Overall, the Federal Government's total incremental resources amounted to N20.4 trillion. Borrowing accounted for the largest portion at 58%, followed by subsidy savings at 27%, and other revenue at 15%. These funds were allocated to various expenditures, with wage adjustments (including minimum wage and awards) consuming N9.39 trillion. External debt service reached N9.37 trillion, influenced by exchange rate depreciation, and strategic infrastructure development received N6.47 trillion.

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So, the subsidy savings showed up in the Federation accounts by way of higher revenue collections as a result of the reforms.