Nigeria's subsidy reform: ₦14 trillion saved but no progress?
President Tinubu removed fuel subsidy on May 29, 2023, abruptly ending a regime that cost ₦4 trillion annually. The reform promised $7.5 billion in yearly savings, infrastructure projects, cash transfers, and 3,000 CNG buses. However, nearly three years later, the promised gains remain elusive. Inflation hit 34.2% (food >40%), poverty deepened, and the #Endbadgovernance protest was quelled in August 2024. An October 2025 report noted that despite ₦14 trillion in subsidy savings distributed to states, infrastructure and public services show little improvement. Debt servicing in the 2026 budget consumes ₦15.52 trillion—more than health, education, and security combined. Nigeria’s approach contrasts sharply with global peers: Indonesia cut subsidies while stabilising inflation, Ghana used targeted cash transfers (LEAP), Malaysia phased price hikes protectively, and Saudi Arabia linked cuts to Vision 2030 investments. Nigeria removed subsidies without a roadmap, relying on ad-hoc palliatives that failed to cushion the shock or build trust. The recommended fix is a five-step sequence: (1) Conduct a 90-day independent audit of subsidy and FX reform savings to restore transparency; (2) Execute a Poverty and Social Impact Analysis (PSIA) to scale targeted social protection; (3) Institutionalise a “Subsidy Savings Regime” within 3–6 months, ring-fencing allocations—60% to infrastructure, 25% to social sectors, 15% to power—with public tracking; (4) Accelerate CNG and renewable energy transition to cut fuel dependence; (5) Forge a National Economic Compact with labour, CSOs, and the private sector to sustain long-term buy-in. Skipping this sequence risks turning reform into a cycle of pain without measurable progress or economic rebirth. Will the Tinubu administration implement these structural changes, or will the ₦14 trillion in savings continue dissipating into untracked spending while debt and public disillusionment worsen?