Presidency Defends Tinubu's Reforms, Dismisses N7.98tn Oil Windfall Claim

Nigeria's Presidency has launched a robust defense of President Bola Tinubu's economic reforms, directly challenging criticisms from former Vice President Atiku Abubakar. Presidential spokesperson Bayo Onanuga argued that Abubakar's assessment relied on outdated data and ignored the progress made since the implementation of key reforms in 2023 and 2024.

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There is no such windfall of N7.98 trillion. Any incremental revenue from higher oil prices is reflected in the monthly FAAC figures.

Abubakar had previously accused the administration of "fiscal recklessness," citing increased borrowing, the removal of fuel subsidies, tax reforms, and an alleged "oil windfall" of N7.98 trillion. He suggested Nigeria was drifting economically. The Presidency, however, characterized the oil windfall calculation as "fundamentally flawed."

Officials explained that any incremental revenue from higher oil prices was reflected in monthly fiscal allocations. They pointed out that a shortfall in daily crude production, compared to the forecast, partially offset gains from higher Brent crude prices. Furthermore, they noted that some crude volumes were pledged for loans used to finance the now-removed fuel subsidy, a move the Presidency lauded as stopping "bleeding."

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The convenient mistake many analysts make is to multiply the oil price by the daily crude production volume to determine revenue to the government. Such analyses ignore the cost of production, the share of crude belonging to the oil-producing companies and the impact of crude sale contracts such as forward contracts designed to hedge against price volatility.

The government also highlighted that analyses often incorrectly multiply oil price by production volume without accounting for production costs, the share belonging to oil companies, and the impact of crude sale contracts like forward contracts used for hedging. The Presidency asserted that the Tinubu administration pursued necessary structural reforms to restore macroeconomic stability and foster sustainable growth. They argued it's unfair to judge a reform program solely on its most difficult phase, noting Nigeria's dollar-denominated GDP has rebounded from approximately $253 billion to $377 billion following foreign exchange reforms, with Naira GDP rising from N314 trillion to N530 trillion.

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The Nigerian economy had recovered considerably since the exchange rate realignment.