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The National Orientation Agency (NOA) has revealed that Nigeria’s decision to eliminate fuel subsidies has led to a monumental financial turnover, freeing more than $ 84 billion and allows the federal government to fund 40 main road projects throughout the country over the past two years.
In the policy document entitled “Two years later: The main benefit of the removal of subsidies,” Noa provides a comprehensive detail about economic assistance and improving infrastructure because controversial reform is implemented.
“For decades, especially since the emergence of the current Democratic dispensation, a large Albatros from the Federal Government has become an oil subsidy regime. Successive administrative spirit to tame the threat has proven failure while the economy continues to dissolve,” the agent said.
The report tracks the cost of an unsustainable subsidized regime, highlighting that between 2005 and 2022, the government respectively issued $ 84.39 billion for fuel subsidies. This figure represents more than 70% of potential federal income, dragging the country towards financial collapse.
“In 2015, many Nigerians had reached consensus that it was time for subsidies to be exiled to historical trash bins, because the subsidy budget in 2022 rose 700 percent to N4TN, the highest in the history of subsidies,” the document said.
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Noa praised the elimination of fuel subsidies as an important step that saved Nigeria from the soon economic collapse and provided a fiscal lifeline for the federal government and state.
“Fuel subsidies consume more than 70 percent of the potential for federal government revenue, forcing the central government and state to switch to heavy loans to finance their budget expenditure, but the transfer helps the country to save billions,” the agent said.
Furthermore, explaining that before the reform, Nigeria spent 97% of its income for debt service, with a total country debt across the N100 trillion threshold. However, the withdrawal of subsidies allows the state to improve fiscal health, pay salaries on time, and cut their debt burden.
“Countries are now swimming in the inflows of funds, paying salaries at maturity even though more than 100 percent of the minimum wage increase and drastically reduces their debt portfolio because the removal of subsidies places more money into their hands.”
According to the agency, the ripple effect of the policy was immediately felt through increasing income allocation. In 2023, the state and local government received a total of N6.16 trillion in the FAAC allocation, up from N4.79 trillion in 2022. In 2024, that number jumped to N15.26 trillion, with N9.58 trillion distributed to the Subnational Government – an increase of more than N3 trillion from the previous year.
Fiscal discipline resulting from an increase in income also causes a sharp decline in domestic debt.
“In the last 18 months, the total domestic debt profile of 36 states and FCT has declined from N5.82TN in June 2023 to N3.97TN in December 2024
Noa also emphasizes large structural changes in national budgeting. For the first time in decades, capital expenditure now exceeds repeated expenses, signifying new focus on long -term development.
“As part of the profits of subsidized withdrawal, for the first time in decades, Nigerian capital expenditure in the 2025 APROPRISI law is higher than repeated annual expenses. Sequential governments always allocate 70 percent of their annual budget for repeated expenses, leaving only 30 percent for the capital budget.” “
In 2025, capital expenditure was pegged at N23.96 trillion, N10 trillion was higher than repeated expenditure, which was established in N13.64 trillion.
The reality of this fund has directly supported the development of large -scale infrastructure, including commissioning from 40 strategic road projects to commemorate the two years of administration of the Tinubu Bola President, according to the report.
