[OPINION] ₦15.8 Trillion Later: What Did Subsidy Removal Buy Nigerians?

When President Bola Ahmed Tinubu announced the removal of the petrol subsidy in May 2023, Nigerians knew almost immediately that they were going to pay for it. The administration did not hide that fact. It argued that the old subsidy regime had become too expensive to sustain, that it was consuming resources that could be used elsewhere and that the country could no longer continue down that road. The pain, Nigerians were told, would be severe, but it would create room for a more productive use of public money.

More than three years later, the pain needs no explanation. Nigerians have lived through it.

Transport costs rose. Food became more expensive. The cost of running generators went up. Manufacturers faced higher energy and logistics bills. Traders had to spend more getting goods to market. Families that had already been struggling with falling purchasing power began buying less with the same income. For many people, subsidy removal was not an economic policy they discussed in the abstract. It was the reason the cost of getting to work changed, the reason a trip to the market became more expensive and one of the reasons the household budget stopped stretching as far as it once did.

That is why the government’s latest figures deserve close attention. The Federal Ministry of Finance says estimated subsidy savings across the Federation between June 2023 and December 2025 amounted to ₦15.8 trillion. But that number needs to be handled carefully because it is easy to misunderstand what it represents. It was not a ₦15.8 trillion federal windfall sitting in Abuja waiting to be spent. The resources accrued across the three tiers of government. The Federal Government’s estimated share was ₦5.43 trillion, states received ₦6.52 trillion and local governments received ₦3.88 trillion.

So, remarkably, states collectively received more of the estimated subsidy savings than the Federal Government did.

That should receive far more attention than it has.

The national conversation has largely treated subsidy removal as a Federal Government story, which is understandable because the decision came from Abuja and its consequences have been felt across the country. But the financial consequences were distributed throughout the Federation. Governors received more money. Local governments received more money. The Federal Government received more money. If the argument for removing the subsidy was that scarce public resources needed to be put to better use, then every government that benefited from the resulting fiscal space has an obligation to explain what it did with it.

This is where the governors need to enter the conversation more directly.

According to the Finance Ministry, states received about ₦9.17 trillion in additional allocations compared with the pre-removal run rate between June 2023 and December 2025. Local governments received about ₦6.66 trillion in additional allocations over the same period.

Those are substantial sums, especially in a country where many state governments spent years complaining that they did not have enough money to meet even their basic obligations. The argument that states needed greater fiscal capacity was not invented by critics of the subsidy regime. Governors themselves have made it repeatedly.

Now they have that greater fiscal capacity.

What Nigerians should be asking is what it has bought.

There is no reason to assume that the additional money has all been wasted. Some states have built roads and other infrastructure. Governments have paid salaries, settled arrears, invested in security and undertaken projects that were previously beyond their immediate means. It would be unfair to dismiss all of that.

But it would be equally wrong to conclude that because money has been spent, the public has received value for it.

Nigeria has become accustomed to confusing expenditure with achievement. A government announces that billions have been spent on a project, and the announcement itself becomes the evidence of performance. Yet a road that is badly constructed or poorly maintained does not become a successful investment because a large sum was allocated to it. A hospital does not become functional because a building was commissioned. A school does not necessarily produce better education because a new block of classrooms has been opened.

Public money matters because of what it changes.

That is why the call by the Nigeria Employers’ Consultative Association for states and local governments to account for the additional resources they have received deserves to be taken seriously. NECA has called for greater disclosure of the funds received and how they were spent, putting the amount requiring scrutiny at about ₦10.4 trillion.

This should not be treated as an accusation that every governor has stolen money. It is a much more basic demand Tell citizens what happened to the money.

A state government that receives billions in additional revenue should be able to show, without forcing citizens to decode political speeches, how that money was distributed between salaries, debt, infrastructure, healthcare, education, security and other priorities. If most of it went to recurrent expenditure because the state’s obligations had become too heavy, say so. If a large amount was invested in roads, publish the contracts and the costs. If money was saved, explain where it was saved and why. If debt was repaid, show how much and on what terms.

The point is not to create another political spectacle. It is to establish a habit of public accounting.

The Federal Government should be held to the same standard.

Its own numbers show that the fiscal story is considerably more complicated than the familiar claim that the government simply “saved” ₦15.8 trillion by removing the subsidy and then spent it. Between June 2023 and December 2025, the Finance Ministry says the Federal Government had ₦20.4 trillion in incremental resources. Of that, ₦5.43 trillion was attributed to subsidy-related savings, ₦3.12 trillion to other incremental revenues and ₦11.85 trillion to incremental borrowing. Incremental expenditure over the period was put at ₦30.64 trillion.

That distinction matters.

The ₦15.8 trillion was a Federation-wide estimate, not a federal cheque. The Federal Government’s share was only part of the resources available to it, and the government’s expenditure was financed through a combination of additional revenue and borrowing.

The Finance Ministry says about ₦9.39 trillion of the incremental expenditure went towards wage adjustments, minimum-wage-related costs, wage awards, allowances and personnel expenditure. Another ₦9.37 trillion reflected the higher naira cost of external debt service following the depreciation of the currency. Strategic infrastructure accounted for approximately ₦6.47 trillion, while electricity support accounted for about ₦3.14 trillion.

These figures tell us something important that is often missing from political arguments about subsidy removal. Money that became available did not necessarily become free money.

Nigeria’s economic circumstances changed dramatically after the reform. The naira lost substantial value, increasing the naira cost of servicing foreign obligations. Government had to respond to the pressure on workers’ incomes. Electricity subsidies remained a major burden. Existing debts still had to be serviced. At the same time, infrastructure needs remained enormous.

None of that makes scrutiny unnecessary. It makes it more necessary.

The public needs to know not simply what government spent, but why it spent it and what the spending achieved.

That is particularly important because subsidy removal was never supposed to be the achievement itself. It was supposed to create the conditions for better government spending and a stronger economy.

There is a difference.

Removing a subsidy does not build a road. It does not employ a teacher. It does not equip a hospital. It does not make electricity reliable. It creates fiscal room and changes the incentives around public finance. What government does with that room is where the real test begins.

Three years is not enough time to transform an economy as large and structurally weak as Nigeria’s, and it would be unrealistic to pretend otherwise. But it is long enough to demand evidence of direction. The public should be able to identify areas in which the additional resources are beginning to improve the country’s productive capacity rather than simply keeping government afloat.

This is where the argument over subsidy removal often becomes too shallow.

Those who defend the reform are right to point to the enormous cost of the old system. Those who complain about the reform are right to point to the hardship it has imposed. Neither observation cancels the other out.

The subsidy may have been fiscally unsustainable, while its removal may still have been badly cushioned. The reform may have been necessary, while the government’s response to its social consequences may still deserve criticism. The country may have gained fiscal space while ordinary households simultaneously became poorer.

All of these things can be true.

The important issue now is whether Nigeria is using that difficult adjustment to build something better.

The states provide one of the clearest places to look.

FAAC distributions have continued to rise. In July 2026, the three tiers of government shared a record ₦3.007 trillion, following ₦2.551 trillion in June. In the first six months of 2026, the 36 states collectively received about ₦4.54 trillion from FAAC, roughly 25.77 percent more than during the corresponding period of 2025.

For citizens, these numbers should mean more than another record in a government revenue report.

If a state is receiving substantially more money, people should eventually see some evidence of it in the quality of public services and the economic environment around them. Roads should become more usable. Public hospitals should function better. Schools should receive sustained investment. Water and other basic infrastructure should improve. Businesses should find it easier to operate. Young people should have more reason to believe that economic opportunity exists beyond leaving their communities.

Not everything can happen at once, and not every problem is the responsibility of a governor. But the era in which state governments could blame Abuja for almost every failure should be coming to an end.

The governors now have a much stronger financial position than they had before the subsidy was removed.

With that comes a stronger case for holding them accountable.

President Tinubu has made this point himself when defending the reform, arguing that many states had struggled to pay salaries and pensions before his administration and that the increase in allocations has given them greater room to operate. If that is so, then the next stage should be to move beyond survival.

A state that has more money should not simply become a state that spends more money. It should become a state that can do more with money.

That means investing in things that reduce the cost of economic activity and expand the state’s future revenue base. It means infrastructure that allows farmers to get produce to markets, roads that reduce transport costs, power solutions that support businesses and public institutions, education that gives young people useful skills and healthcare that prevents families from being financially destroyed by illness.

It also means being careful about turning temporary increases in revenue into permanent increases in government consumption.

Nigeria has seen what happens when governments become dependent on revenue that can rise and fall with commodity prices and other factors outside their control. Higher allocations can provide relief, but they do not constitute an economic strategy. States need to use periods of stronger revenue to build productive economies that can eventually stand on their own.

The Federal Government faces the same challenge at a much larger scale.

The danger is that subsidy removal becomes permanently defended on the basis that it increased government revenue, while the public never gets to see a corresponding improvement in the economy. That would leave Nigerians with the worst possible version of reform: the old subsidy is gone, the hardship remains and the promised transformation is perpetually somewhere ahead.

That is not a sustainable political arrangement.

It is also why the renewed political debate over bringing back petrol subsidies should be treated with caution. Atiku Abubakar has argued for restoring a form of subsidy as part of his economic response ahead of the 2027 election. That proposal will naturally appeal to people who are feeling the immediate cost of the present arrangement.

But Nigeria should not make economic policy by moving endlessly between two unsatisfactory extremes.

If the old subsidy system was riddled with waste, smuggling and fiscal pressure, simply restoring it does not solve those problems. If its removal has created substantial resources but those resources are not producing enough public value, then simply defending the reform does not solve the problem either.

The country needs to get beyond that argument.

The most useful debate is not whether Nigerians should be grateful that the subsidy was removed or whether they should demand that it return. It is whether the fiscal space created by the reform is being used to make the Nigerian economy more productive and public services more effective.

That requires transparency, but it also requires patience with the right kind of spending. Some government expenditure will not produce an immediate visible result. A power project may take years to transform an industrial area. A major road may take time to unlock agricultural or commercial activity. Education spending may take a generation to produce its full return.

That is precisely why citizens need information. Without it, legitimate long-term investment and wasteful spending can look exactly the same from the outside.

Government should therefore publish enough detail for Nigerians to follow the money without having to rely on political claims. States should do the same. Local governments should not be allowed to vanish from the conversation simply because their finances attract less national attention.

Accountability should not depend on which party controls a government or whether the people asking the questions support the administration in power.

That principle matters particularly in an election cycle. As 2027 approaches, politicians will have every incentive to present the subsidy story in whatever way best serves their campaigns. Those who support Tinubu will point to the savings and increased allocations. His opponents will point to the hardship and declining purchasing power. Both sides will select the facts that help their case.

The public should be more demanding than that.

The useful question is what happened to the resources.

The answer will not be found in one figure. It will be found in budgets, procurement records, completed projects, functioning institutions and, ultimately, in whether government has become more capable of delivering value for the money it receives.

The ₦15.8 trillion estimate is significant because it establishes the scale of the resources involved. It also makes clear that the subsidy debate cannot remain a conversation about the Federal Government alone. States received ₦6.52 trillion of the estimated savings, more than the Federal Government’s ₦5.43 trillion, while local governments received another ₦3.88 trillion.

That is too much public money to disappear into the background of political arguments.

Nigerians were told that the subsidy could no longer continue and that the money had to be used more wisely. They have since paid a very real price for that decision through higher transport costs, higher food prices and a higher cost of doing business.

The least the country should expect in return is a clear account of what became possible because the subsidy was removed.

The Federal Government owes Nigerians that explanation. So do the governors. So do local governments.

And the standard should not be whether they can point to how much money they spent. It should be whether Nigerians can point to what the money changed.

The subsidy was removed on the argument that the country could no longer afford the old system and that the resources would be put to better use. Nigerians have now endured more than three years of higher transport costs, higher food prices and higher operating costs for businesses. The government has provided figures showing how much additional revenue became available. What Nigerians need now is the other half of the story: what that money has actually changed in their lives. That responsibility belongs not only to the Federal Government, but also to the governors and local government authorities who received a substantial share of it.

Stephanie Shaakaa shaakaastephanie02@gmail.com

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