Wage bill, other spending exceed subsidy savings — Oyedele

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Minister of Finance and Coordinating Minister for the Economy, Taiwo Oyedele

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…Govt saved N15.8trn from subsidy removal, naira floatation

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…FG got only N5.43trn, borrowed N11.85trn

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…No large pool of cash available to FG

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By Emma Ujah, Abuja Bureau Chief

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ABUJA — The Federal Government has clarified that the N15.8 trillion saved from fuel subsidy removal and the flotation of the naira between June 2023 and December 2025 did not translate into a huge pool of cash available to it.

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Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, disclosed this on Wednesday while presenting the government’s economic reforms scorecard in Abuja.

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Oyedele explained that the N15.8 trillion in estimated subsidy savings was shared among the Federal Government, states, local governments and other statutory recipients, with the Federal Government receiving only N5.43 trillion.

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According to him, the Federal Government’s total incremental resources during the period stood at about N20.4 trillion, comprising its share of subsidy savings, additional revenues and borrowing.

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He said the N20.4 trillion comprised N5.43 trillion from subsidy savings, N3.12 trillion in other incremental revenues and N11.85 trillion in additional borrowing.

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The minister, however, said the government’s incremental expenditure during the same period was significantly higher, reaching approximately N30.64 trillion.

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He listed additional spending on wages, debt servicing, infrastructure, electricity support, social programmes and other government obligations as major components of the expenditure.

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Oyedele said the figures should therefore be viewed as a financing story rather than simply a savings story.

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“The N15.8 trillion commonly described as subsidy savings was not retained by the Federal Government alone. It was shared across all the tiers of government.

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“The Federal Government’s estimated share was N5.43 trillion. When combined with N3.12 trillion in other incremental revenues and N11.85 trillion in incremental borrowing, the Federal Government had approximately N20.4 trillion in incremental resources,” he said.

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He added that the government’s additional expenditure of N30.64 trillion during the period meant that the savings from subsidy removal were insufficient to cover its increased financial obligations.

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“Over the same period, additional expenditures amounted to approximately N30.64 trillion. Subsidy removal therefore did not create one large pool of cash available to the Federal Government.

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“It reduced a major fiscal burden and the amount of additional borrowing that would otherwise have been required,” Oyedele said.

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The minister’s explanation comes amid widespread perceptions that the removal of the petrol subsidy had freed up a huge volume of resources for the Federal Government to spend.

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Oyedele said the reform should instead be understood as a measure that eased pressure on public finances and reduced the need for even greater borrowing.

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He maintained that the government’s fiscal position remained constrained by competing expenditure demands, including personnel costs, debt obligations and investments in infrastructure and social programmes.

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