The Federal Government has confirmed it will soon release a comprehensive breakdown of how proceeds from the fuel subsidy removal have been utilised, as officials defend policies blamed for exacerbating the cost-of-living crisis.
Speaking at the African Emerging Markets Forum in Abuja on Wednesday, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, acknowledged that savings from both fuel subsidy removal and foreign-exchange market reforms had been largely absorbed by rising debt-servicing costs and increased government expenditure.
Mr Oyedele disclosed that fuel subsidies and what he termed an “implicit foreign-exchange subsidy” had collectively accounted for approximately five per cent of Nigeria’s GDP prior to their abolition. He noted that debt-servicing costs had escalated significantly, with borrowing rates surging to 24 per cent from roughly eight per cent before the reforms were implemented.
The Minister further revealed that the government’s wage bill had nearly doubled following an increase in the national minimum wage to ₦70,000 ($51) per month. Additionally, expenditure on the education loan programme, which provides tuition support and monthly stipends to more than 1.5 million students, had been substantially increased.
Addressing widespread criticism, Mr Oyedele rejected a recent International Monetary Fund assessment suggesting that millions of Nigerians remained in poverty despite investor-friendly reforms. He maintained that a temporary decline in real incomes was inevitable following subsidy removal.
“The government will track progress through multidimensional poverty indicators, real per-capita income growth, and income inequality metrics, rather than relying solely on headline GDP growth figures,” he stated.
The publication of subsidy savings details is expected to provide greater transparency on government spending and address growing public concern over the economic impact of the reforms.