…as 27 states get support to pay salaries from ₦10.4trn allocation
By Precious Mark
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has revealed that the removal of fuel subsidies and the unification of the foreign exchange market mobilised ₦15.8 trillion in extra resources for the federation, providing a critical financial lifeline that enabled states to clear salary backlogs.
The report was unveiled during a high-level media briefing hosted at the Federal Ministry of Finance in Abuja on Wednesday.
Presenting the figures, Oyedele explained that the funds accumulated between June 2023 and December 2025, with the Federal Government receiving ₦5.4 trillion, while state and local governments shared ₦10.4 trillion.
Specifically, the ₦15.8 trillion in subsidy savings was distributed across tiers of government as follows: the Federal Government received ₦5.4 trillion (34 percent), states received ₦6.5 trillion (41 percent), and local government councils received ₦3.9 trillion (24 percent).
Addressing journalists, the Minister emphasized that the administration’s intention was not to take a victory lap, but to give a transparent account of the difficult policy choices made.
Reflecting on the economic trajectory, Oyedele stated, “For the past three years, the administration of President Bola Ahmed Tinubu has embarked on major reforms to address age-long economic challenges, the removal of a fuel subsidy that was quietly bankrupting the country, and the unification of an exchange rate system that had become a source of arbitrage, distortion, and corruption, rather than stability.”
“Those decisions came at a real cost, and we are not here to pretend otherwise. Prices rose,” he said.
“The naira adjusted sharply. Households and businesses felt it, and many still do. What we want to do today is put the whole picture in front of you, the Nigerian people: what those reforms cost, what they delivered, and just as importantly, what they prevented,” he added.
Clarifying how the revenue was tracked, the Minister explained that the savings did not appear as a direct payout labelled subsidy savings.
Instead, they manifested through increased naira collections from customs duties, petroleum profit taxes, and exchange rate adjustments where dollar-denominated receipts translated into higher local currency values.
According to the fiscal breakdown, the Federal Government’s incremental resources totalled ₦20.4 trillion.
This comprised ₦5.4 trillion from subsidy-related savings, ₦3.1 trillion in independent revenues and remittances from government-owned enterprises, and ₦11.9 trillion in incremental borrowing.
On the expenditure side, incremental spending by the Federal Government reached ₦30.64 trillion during the same period.
Highlighting the distribution of these funds and the underlying fiscal priorities, Oyedele explained, “The incremental amount that the Federal Government spends paying higher wages exceeds the entire savings it earned from subsidy removal. This is evidence that the reform was never introduced purely for revenue purposes, but to address entrenched corruption in an artificially managed fuel subsidy and foreign exchange market.”
A total of ₦9.39 trillion went toward wage adjustments, consequential minimum wage increases following the adjustment from ₦30,000 to ₦70,000, and public service allowances.
External debt service accounted for ₦9.37 trillion due to currency adjustments, while ₦6.5 trillion was channelled into strategic capital projects to support national infrastructure.
The report highlighted 25 performance indicators across five thematic areas: fiscal sustainability, external stability, investment climate, social impact, and macroeconomic growth.
While pointing to positive indicators, the Ministry candidly addressed ongoing economic pressures.
Regarding social impact and welfare initiatives such as cash transfers to 15 million households, student loans supporting over 1.5 million students, subsidised mortgage schemes, and agricultural input support, the Minister noted,
“On food security and household welfare, our assessment is candid. This remains a work in progress. Poverty alleviation and household welfare recovery are still classified in our scorecard as unfinished business, not a victory lap. Where we stand today, the initial results are visible in the data, not just in our arguments.”
Oyedele further noted that the fiscal liquidity prevented an impending insolvency crisis across subnational governments.
“It is harder to see what did not happen, but our scorecard puts numbers to it. In May 2023, twenty-seven states could not reliably pay salaries. Today, that number is zero. On the pre-reform trajectory, our estimate is that at least thirty states would be in that position by now. The official exchange rate premium over the parallel market, once above 60 percent, is now under 5 percent. Left unaddressed, we project it would have exceeded 150 percent, leaving foreign exchange virtually inaccessible for most citizens and businesses. Furthermore, the legacy Ways and Means advances, which stood at ₦30 trillion, have been curtailed rather than allowed to double.”
Additional economic indicators in the scorecard showed that headline inflation eased to 15.91 percent by June 2026, down from 22.41 percent in May 2023, while food inflation slowed to 17.52 percent from 24.82 percent.
Gross external reserves expanded to $34.8 billion, and Nigerian stock market capitalisation rose from ₦31 trillion to approximately ₦150 trillion.
Furthermore, real GDP growth reached 3.89 percent against a 2.31 percent baseline, with the Monetary Policy Rate standing at 26.5 percent compared to an 18.5 percent baseline.
Looking ahead, the Minister reaffirmed the administration’s commitment to advancing fiscal consolidation, enhancing governance transparency, and guiding headline inflation toward single digits, urging citizens to evaluate the trajectory through verified data.