Nigeria defends subsidy removal savings use, targets $1 trillion economy by 2030

Finance Minister Taiwo Oyedele on Thursday defended the use of savings from Nigeria’s removal of fuel and foreign-exchange subsidies, saying the funds have been largely absorbed by higher debt-servicing costs and increased government spending, even as he reaffirmed the administration’s target of growing the economy to $1 trillion by 2030.

Speaking at the 7th African Emerging Markets Forum in Abuja, organized by the Central Bank of Nigeria, Oyedele acknowledged public scrutiny over the fate of the savings. He promised greater transparency, saying a detailed breakdown would be released “in a few days.”

The combined cost of fuel subsidies and what Oyedele described as an implicit foreign-exchange subsidy amounted to roughly 5% of gross domestic product before their removal under reforms launched by President Bola Tinubu in 2023. The reforms won backing from investors and international lenders but drove up living costs for millions of Nigerians, raising questions over how the resulting savings have been used.

Oyedele said the savings were not intended to be banked. “Saving money was not the primary objective. It was eliminating the distortion and the corruption in the system, which is more fundamental,” he said, according to local reports.

Part of the savings went to servicing existing debt. Oyedele said that before the reforms, Nigeria financed some spending by printing money, fueling inflation. After reforms, interest rates rose sharply, pushing debt-servicing costs higher. “Instead of paying eight per cent on our debts, we were paying as high as 24 per cent,” he said.

The government also nearly doubled its wage bill after raising the minimum wage from 30,000 naira (about $22) to 70,000 naira (about $51) per month, Oyedele said. Additional spending was channeled into the Nigerian Education Loan Fund (NELFUND), which now provides tuition support and monthly stipends to more than 1.5 million students, allowing parents to redirect money previously reserved for school fees to other household needs.

**Target not a slogan**

Oyedele said the government’s ambition to grow Nigeria into a $1 trillion economy by 2030 is “not a slogan” but a target achievable through sustained reforms. He described the administration’s economic program as designed to restore macroeconomic stability, improve competitiveness, and attract investment.

“We plan to trace reform by reform against the work still ahead of us,” he said, according to Premium Times.

He pointed to evidence of progress: real GDP grew 3.89% in the first quarter of 2026, while the economy expanded 11.2% in dollar terms in 2025. The non-oil sector grew 3.94% in the first quarter, indicating diversification. Gross reserves have crossed $50 billion, and inflation has fallen meaningfully from its 2024 peak. Oyedele also cited Nigeria’s exit from the Financial Action Task Force (FATF) grey list and the successful recapitalization of the banking sector as signs of improved investor confidence.

“Capital inflows have increased significantly, whether it is FPI or FDI. The capital market is the best-performing in the world for 2026 year-to-date,” he said.

**Challenges remain**

Oyedele acknowledged that macroeconomic stability alone is not enough if ordinary Nigerians do not feel the improvement. “A reform that shows up on national statistics but not on the household dining table hasn’t finished its job,” he said, according to Premium Times.

He described economic transformation as a three-phase journey: stabilization, growth, and shared prosperity. “We have done the gruelling foundational work of the first phase,” he said.

Oyedele rejected a recent International Monetary Fund assessment that millions of Nigerians remained in poverty despite the reforms, arguing that a temporary decline in real incomes was inevitable after subsidy removal. He said the government would track progress through multidimensional poverty, real per-capita income growth, and income inequality, rather than by headline GDP growth alone.

The minister urged investors to seize opportunities during the period of structural change. “We are working to simplify our regulatory environment, protect your capital and remove the friction that costs you time and money. In return, we ask you to match our reforms with your investment and your belief in what this continent is building,” he said, according to local reports.