THE Federal Government has said it will soon publish details of how savings realised from the removal of fuel subsidy have been spent, amid growing public interest over the utilisation of the funds generated from the economic reforms.
News Point Nigeria reports that the government also disclosed that savings from the removal of fuel subsidies and foreign-exchange market reforms have largely been absorbed by rising debt-servicing costs and increased government expenditure, as officials continue to defend reforms widely blamed for worsening the cost of living.
Speaking at the African Emerging Markets Forum in Abuja on Wednesday, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said fuel subsidies and what he described as an implicit foreign-exchange subsidy had cost Nigeria approximately five per cent of its Gross Domestic Product (GDP) before the reforms were implemented.
According to him, a significant portion of the savings has gone into servicing government debt, noting that borrowing costs rose sharply to as much as 24 per cent from about eight per cent before the reforms.
Oyedele also disclosed that the Federal Government’s wage bill nearly doubled after the national minimum wage was increased to ₦70,000 per month, more than twice the previous amount.
He further explained that government spending had risen due to increased investment in the education loan programme, which currently provides tuition support and monthly stipends to more than 1.5 million students across the country.
“I’ve heard this question so many times, and guess what? It’s a valid question,” Oyedele said while responding to concerns over the utilisation of subsidy savings.
The minister also rejected a recent assessment by the International Monetary Fund (IMF), which stated that millions of Nigerians remained in poverty despite reforms that have been welcomed by investors.
He argued that a temporary decline in real incomes was an inevitable consequence of removing long-standing subsidies and implementing foreign exchange reforms.
According to Oyedele, the government will assess the success of its economic reforms using broader development indicators rather than relying solely on headline GDP growth.
He said progress would be measured through multidimensional poverty levels, growth in real per-capita income and income inequality, which he described as more accurate indicators of the impact of the reforms on the lives of Nigerians.
