Nigeria’s subsidy savings mostly fund wages and debt, leaving just 2% for social welfare

According to the Ministry of Finance Reform Scorecard published on finance.gov.ng, between June 2023 and December 2025 the Federal Government generated N20.4 trillion in incremental resources: N5.4 trillion from fuel subsidy savings, N3.1 trillion from other government-owned entity revenues, and N11.9 trillion from new borrowing. Of the N15.8 trillion in subsidy-related savings, states and local governments received N10.4 trillion while the FG kept N5.4 trillion.

The FG then deployed N30.64 trillion in incremental expenditure over the same period. The largest allocations were N9.39 trillion for minimum wage increases and public‑servant allowances, N9.37 trillion for external debt service (driven by naira depreciation), and N6.5 trillion for strategic infrastructure. Social welfare transfers totaled only N424 billion—just 2.1% of incremental resources—with the student loan scheme NELFUND receiving N223.8 billion (1.1%). Critics argue this pattern underfunds education and health, relies on borrowing to meet recurrent costs, and risks a debt trap.

The Scorecard also notes off‑balance‑sheet energy costs (NNPC’s N7.13 trillion “energy security expense” in 2024) and the lack of ring‑fencing for subsidy savings, which flowed into the general Federation Account and were subject to political pressures for salaries and debt. Nigerians should ask whether future savings will be directed to human capital, demand transparency on NNPC’s energy expenses, and push for dedicated funds that tie subsidy removals to education and health investments.

SOURCE: https://nairametrics.com/2026/08/22/tinubus-reform-scorecard-more-money-same-old-priorities/