How Tinubu Is Spending the Money from Fuel Subsidy Removal

When President Bola Tinubu ended Nigeria’s long-standing petrol subsidy in May 2023, it unlocked resources that had been siphoned away by government revenue for decades.

Under the previous regime, monthly subsidy payouts averaged around ₦9 billion; today, federated allocations hover near ₦1.6 trillion per month, a roughly 170× increase in fiscal space to fund development priorities.

Massive Surge in Shared Revenues

Rather than letting those savings be spent on recurring expenses, Tinubu’s government channels them through existing federal, state, and local government disbursement mechanisms. In contrast to the Buhari era’s ₦9 billion monthly share, states and local councils now receive an average of ₦1.6 trillion each month from subsidy savings, funds earmarked for specific projects and social programs

Targeted Social Safety Nets

A cornerstone of this reallocation is the expansion of social welfare initiatives. According to the Minister of State for Finance, Dr. Doris Nkiruka Uzoka-Anite, subsidy-saved funds underwrite “targeted interventions,” such as conditional cash transfers, student loan schemes, and low-cost consumer credit. These measures aim to protect vulnerable households from the price shocks that accompanied subsidy removal and to rebuild public trust in governance .

Infrastructure and Transport Upgrades

Tinubu also emphasises financing critical infrastructure. The president recently announced that a portion of the savings is dedicated to improving public transportation and upgrading road networks.

At the Art of Technology Lagos 6.0 event, Governor Babajide Sanwo-Olu highlighted how Lagos uses subsidy funds to support digital‐economy projects and mass transit enhancements, illustrating a broader federal push to modernise transport systems nationwide.

Strengthening Fiscal Resilience

Beyond immediate spending, the government is bolstering its fiscal buffers to weather external shocks. Tinubu said these reserves make Nigeria “more resilient” against oil‐price volatility and global downturns, a critical move after years of budget shortfalls and over-reliance on oil revenues. By building robust contingency funds, the administration hopes to avoid abrupt spending cuts or new taxes when markets gyrate.

Agricultural and Economic Reforms

Some subsidy savings are funnelled into agricultural loans and input subsidies aimed at boosting food production and curbing inflation. As Information Minister Mohammed Idris noted, “high‐impact projects and schemes” in the country, including support for smallholder farmers, draw directly from these newly available resources, aligning with the administration’s goal of broad‐based, inclusive growth.

Challenges and Accountability

Despite these promising reallocations, critics warn that without transparent tracking and rigorous oversight, funds risk being diverted or mismanaged.

Calls are growing for an independent audit of subsidy‐savings disbursements and for strengthening institutions like the Budget Office and Debt Management Office to ensure every naira reaches its intended project.