The Federal Government has pledged to publish a comprehensive breakdown of how savings from the removal of fuel and foreign exchange (FX) subsidies have been utilised, amid mounting public concerns over the impact of the reforms and persistent questions about the destination of the funds.
The Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, made the commitment on Thursday during the 7th Africa Emerging Markets Forum in Abuja.
His remarks came in response to concerns raised by the World Bank Group’s Chief Economist and Senior Vice-President for Development Economics, Indermit Gill, who noted that many Nigerians remain unconvinced that the gains from the reforms have translated into improved living standards.
Gill acknowledged that the government had increased revenue, reduced subsidies and narrowed the fiscal deficit. However, he said many citizens were still asking how the additional resources had been spent and whether they had delivered tangible benefits.
He also commended the Central Bank of Nigeria (CBN) for what he described as a “superb job” in reducing inflation from above 30 per cent to below 15 per cent, while stressing that further progress would require stronger fiscal support from the government.
Responding, Oyedele admitted that public concerns over subsidy savings were legitimate and assured Nigerians that the government would release a detailed account within days.
“There was a question about the subsidy savings. Where has it gone to? I’ve heard this question so many times. And guess what? It’s a valid question,” he said.
According to the minister, the combined impact of removing fuel subsidies and what he described as the “subsidy on foreign exchange” amounted to about five per cent of the country’s Gross Domestic Product (GDP).
“So where has the money gone? In a few days, you will see the detailed analysis because we believe we owe Nigerians an explanation of what we do. That’s what transparency looks like,” Oyedele said.
He explained that the reforms were introduced primarily to eliminate economic distortions rather than simply generate fiscal savings. He argued that many Nigerians assessed the reforms without considering the state of the economy had the measures not been implemented.
Oyedele disclosed that a significant portion of the savings had been offset by higher debt servicing costs resulting from increased interest rates, the implementation of the new N70,000 minimum wage and expanded social intervention programmes.
Among the interventions, he highlighted the Nigerian Education Loan Fund (NELFUND), which he said has provided tuition support and monthly stipends to more than 1.5 million students.
The minister also defended the government’s continued borrowing despite improved revenue generation, explaining that stronger revenues do not automatically eliminate the need for borrowing when expenditure exceeds income.
“If you have a budget to spend 10 and your revenue target is six, you need to borrow four. If you collect seven, you’ve exceeded your target, but you still need to borrow three,” he said, adding that borrowing remains justified if it generates returns greater than its cost.
On poverty, Oyedele rejected the World Bank’s suggestion that the reforms had worsened living conditions. He argued that the rise in poverty reflected the unavoidable consequences of correcting long-standing economic distortions.
“The reform itself was a reset. We were living in fiscal illusions. We needed to stop deceiving ourselves so the country could move forward,” he said.
He added that the government’s focus had shifted to translating macroeconomic stability into higher productivity, quality jobs and inclusive economic growth.
The minister also revealed that the Federal Government was developing a framework aimed at reducing the cost of capital without introducing new subsidies. According to him, the initiative will complement the CBN’s efforts to curb inflation while encouraging investment in the real sector.
Speaking at the forum, the Director of Statistics at the Central Bank of Nigeria, Dr Okpanachi Moses, presented findings from a new CBN study showing that food price volatility and inflation reinforce one another across many Sub-Saharan African countries, reducing the effectiveness of conventional monetary policy in fragile economies.
Presenting data from 36 countries, Moses said conflict-affected economies experienced weaker monetary policy transmission, with food price shocks feeding more rapidly into headline inflation. He added that Nigeria was classified among the region’s stable economies.
“What we found is, interestingly, a mutually reinforcing relationship between food price volatility and inflation persistence,” he said, noting that households across many African countries spend between 40 and 60 per cent of their income on food, making food price increases a major driver of overall inflation.
He advised central banks in conflict-affected countries to apply interest rate policies cautiously, arguing that restoring food systems and implementing structural reforms would often be more effective in containing inflation than relying solely on monetary tightening.
“Central banks in countries experiencing conflict must apply demand-side tools with caution. What is critical is greater investment in restoring and stabilising the food system,” Moses said.
He further emphasised that policy responses should be tailored to each country’s unique circumstances, adding that structural reforms remain essential to strengthening monetary policy and improving inflation-targeting frameworks across the region, including in Nigeria.
