Federal allocations alone can't guarantee prosperity, says Finance Minister Oyedele

Nigeria's Minister of Finance and Coordinating Minister of the Economy, Prof. Taiwo Oyedele, has asserted that states cannot rely solely on federal allocations for prosperity. He urged them to cultivate sustainable revenue streams and boost economic growth.

Oyedele revealed that Nigeria recorded estimated savings of N15.8 trillion from the removal of fuel subsidy and the liberalization of the foreign exchange market between June 2023 and December 2025. However, he clarified that these reforms did not leave the Federal Government with a substantial cash reserve as commonly believed.

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Nigeria must move from an allocationdependent economy to one driven by production, investment and job creation.

Speaking at the 2026 National Council on Finance and Economic Development (NACOFED) conference in Owerri, Imo State, Oyedele highlighted that the Federal Government's wage bill significantly exceeded the savings from subsidy removal. He insisted that the government's reforms have successfully reduced the overall borrowing burden.

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The figures tell a financing story, not simply a savings story.

He stressed the need for stronger fiscal federalism, improved revenue generation, and economic diversification to enhance Nigeria's resilience against economic shocks. "Nigeria must move from an allocation-dependent economy to one driven by production, investment and job creation," Oyedele stated. He noted that monthly federation account allocations have risen from between N300 billion and N600 billion before 2023 to over N2 trillion due to recent economic reforms.

Of the N15.8 trillion in "subsidy savings," the federal government received N5.43 trillion, state governments N6.52 trillion, and local government councils N3.88 trillion. Oyedele explained that the federal government generated an additional N20.4 trillion from subsidy savings, increased revenues, and borrowing during the period but spent N30.64 trillion on wages, debt servicing, infrastructure, electricity subsidy, and other obligations. "The figures tell a financing story, not simply a savings story," he said, adding that the savings eased fiscal pressure and reduced the need for borrowing.

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The N15.8 trillion commonly described as subsidy savings was not retained by the FG alone. It was shared across the federal, state and local governments, as well as other statutory beneficiaries.