How FG, States, LGs Shared N15.8trn Subsidy Savings

By Adedapo Adesanya

The Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, has said from the N15.8 trillion in subsidy savings, N5.4 trillion went to the federal government, and N10.4 trillion was shared between the 36 states and the 774 local governments of the federation between June 2023 and December 2025.

Mr Oyedele disclosed this on Wednesday in Abuja while presenting the federal government’s Nigeria’s Reform Scorecard: The Benefits, Costs and Harms Prevented, an assessment of the economic reforms implemented under President Bola Tinubu.

The finance minister said the N15.8 trillion in subsidy savings was distributed through the Federation Account, rather than being retained entirely by the federal government.

According to him, the central government received N5.4 trillion, representing about 34 per cent of the total savings, the states received N6.5 trillion, or 41 per cent, and the local councils received N3.9 trillion, representing about 24 per cent.

The combined N10.4 trillion allocated to states and local governments accounted for almost two-thirds of the total subsidy savings and was nearly twice the amount received by the federal government.

Mr Oyedele clarified that the N15.8 trillion should not be understood as money accumulated in a dedicated government account labelled “subsidy savings”.

Rather, he said the impact of the reforms was reflected in increased resources available to the federation through higher revenue collections, which were subsequently shared among the three tiers of government through the Federation Account.

The minister said the federal government’s N5.4 trillion share formed only one component of the additional resources available to it during the period.

It also recorded N3.1 trillion in incremental independent revenue, mainly from remittances by government-owned entities, and obtained N11.9 trillion in incremental borrowing.

Together, the three sources provided the federal government with N20.4 trillion in incremental resources between June 2023 and December 2025.

Mr Oyedele said the distribution of the subsidy savings underscored that the reform was not designed simply to increase Federal Government revenue, as a substantial portion of the additional resources accrued to the sub-national governments.

“The reform was never introduced for revenue purposes, but to address entrenched corruption in an artificially managed fuel subsidy and foreign exchange market,” he said.

He added that the federal government subsequently deployed its additional resources, alongside funds from its existing revenue base, to meet N30.64 trillion in incremental expenditure during the period.

Of the N20.4 trillion in incremental resources available to the federal government, borrowing accounted for 58 per cent, subsidy savings for 27 per cent and other revenue for 15 per cent.

The minister said the figures provided a clearer picture of how the financial impact of the subsidy reform was distributed across the Federation, with states and local governments collectively receiving the largest share.