By Tonye Apiri
The Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, has explained how funds saved from the removal of petroleum subsidy are being utilized, stressing that the money is directed towards debt servicing, implementation of the new minimum wage, and student loan support.
Speaking at the 7th Africa Emerging Market Forum in Abuja, Oyedele said part of the savings has also been applied to sustaining key social intervention programs. He emphasized that ending fuel subsidies and unifying exchange rates were difficult but necessary reforms that have helped stabilize Nigeria’s economy after years of structural imbalances.
Acknowledging public concern, Oyedele remarked: “I’ve heard this question so many times, and guess what? It’s a valid question.” He noted that the combined burden of petrol subsidy and foreign exchange subsidy previously consumed about five per cent of Nigeria’s GDP, creating distortions and waste.
The minister revealed that the government will soon release a detailed report on how the savings have been used to promote transparency. “But in the meantime, I can give you some of the highlights,” he said.
On debt servicing, Oyedele explained: “Instead of paying about eight per cent on our debts, we’re paying as high as 24 per cent. When you need to service debt, you don’t debate it. You pay, and you pay on time.”
He also highlighted the new national minimum wage, saying: “The only significant payments made since I assumed office were targeted interventions, including the new minimum wage which raised workers’ pay from ₦30,000 to ₦70,000.”
On student loans, he added: “More than 1.5 million students are currently receiving tuition support and monthly allowances under NELFUND. This has reduced financial pressure on families, freeing up money parents previously spent on school fees for businesses and other household needs.”
Addressing criticism that the government continues to borrow despite higher revenues, Oyedele clarified: “If your budget is 10, your revenue target is six and you eventually collect seven, you have exceeded your revenue target, but you still need to borrow three.”
He dismissed claims that the reforms have failed because poverty rose in the short term, describing the hardship as a necessary phase of correcting fiscal distortions. “Before the reforms, we were printing money to spend. If you stop printing, the spending doesn’t disappear. You need to finance the money you were printing before,” he explained.
Despite the strain, Oyedele pointed out that Nigeria recorded close to 10% real per capita income growth in dollar terms in 2025. He concluded: “We will measure success not just by GDP growth but by reductions in multidimensional poverty, higher real income per person, and lower income inequality.”