Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, says the Federal Government has channelled savings from the removal of fuel and foreign exchange subsidies into debt servicing, salary increases, student loans and other key obligations.
Oyedele disclosed this on Thursday while speaking at the 7th Africa Emerging Markets Forum in Abuja, where he said the government would soon publish a detailed breakdown of how the subsidy savings had been utilised.
According to him, Nigerians deserve transparency on the management of public funds, describing questions about the use of the savings as legitimate.
“But the money saving is also important. In a few days, you will see the detailed analysis because we believe that we owe a duty to explain what we do to the Nigerian people. That’s what transparency looks like,” he said.
Oyedele explained that the combined cost of fuel subsidy and what he described as the “subsidy on foreign exchange” previously accounted for about five per cent of Nigeria’s Gross Domestic Product (GDP).
He said part of the savings was used to clear the Federal Government’s Ways and Means obligations, service rising debt costs and fund the implementation of the new national minimum wage.
“If you stop printing money, the spending doesn’t disappear. You need to finance the money you were printing before. That was part of where the savings went,” he said.
He further noted that rising interest rates had significantly increased the government’s debt servicing costs, with borrowing rates climbing from about eight per cent to as high as 24 per cent.
“Instead of paying eight per cent on our debt, we’re paying as high as 24 per cent. When you need to service debts, you don’t debate whether you need to pay. You pay, and you pay on time,” he added.
Oyedele also said the increase in the national minimum wage from ₦30,000 to ₦70,000 had substantially raised the Federal Government’s wage bill.
He disclosed that the savings had also supported the Nigerian Education Loan Fund (NELFUND), through which more than 1.5 million students have received tuition loans and monthly upkeep allowances.
According to him, the programme has reduced the financial burden on many households, allowing families to channel more resources into businesses and other essential needs.
“We will provide a detailed explanation of how much we saved and how the money has been spent,” he assured.
Addressing concerns over the government’s continued borrowing despite surpassing its revenue targets, Oyedele explained that exceeding revenue projections does not eliminate the need for borrowing when planned expenditure remains higher than total income.
“If you have a budget to spend 10 and your revenue target is six, you need to borrow four. If you eventually collect seven, you have exceeded your revenue target, but you still need to borrow three,” he said.
He maintained that borrowing is sustainable provided the funds are invested in projects that generate returns greater than their cost.
“We must add more value than the cost of every naira and every dollar that we borrow,” Oyedele said.