TINUBU GOVT CLAIMS $84 BILLION SAVED FROM SUBSIDY REMOVAL, STATES BENEFIT FROM FUNDS

The Federal Government has released a comprehensive new report detailing the impact of President Bola Ahmed Tinubu’s decision to eliminate the petrol subsidy on May 29, 2023. According to the National Orientation Agency (NOA), the policy has resulted in cumulative savings of over $84 billion, money which has since been channeled into infrastructure development, debt management, and state-level financial empowerment.
The NOA’s report, titled “Two Years Later: Key Benefits of Subsidy Removal,” explains that Nigeria’s fuel subsidy regime, in place for over two decades, had become a colossal drain on national finances. It noted that in 2022 alone, the country spent ₦4 trillion on subsidizing petrol, representing a 700 percent rise in subsidy expenditure compared to the early 2000s. The report revealed that between 2005 and 2022, Nigeria spent over $84 billion on subsidies — a figure the agency describes as “unsustainable and fiscally reckless.”
Post-subsidy, the financial landscape has drastically improved, the report claimed. Infrastructure development received a boost, including the completion or acceleration of 40 major road projects nationwide. Moreover, states and local governments have seen substantial increases in their revenue allocations. For instance, FAAC disbursements to states and LGAs rose from ₦4.79 trillion in 2022 to ₦6.16 trillion in 2023, and further to ₦15.26 trillion in 2024.
The report credited this inflow with enabling several states — previously unable to meet salary obligations — to stabilize their budgets and resume capital projects. It also noted a decline in the federal government’s debt-servicing burden, which had previously consumed 97 percent of national revenue.
The NOA described the subsidy removal as a bold, painful, but necessary step, urging Nigerians to remain patient and look beyond short-term hardships to the long-term benefits of economic stabilization and infrastructural renewal.