30 months after President Bola Tinubu removed petrol subsidy and introduced other sweeping economic reforms, the Federal Government has spent N30.64tn as government expenditure to ease effect of its policies, while the policies generated N15.8tn in savings for the Federation.

The government said its total incremental expenditure between June 2023 and December 2025 was N30.64tn, exceeding the N20.4tn in additional resources available to the Federal Government from subsidy savings, higher revenue and borrowing by N10.24tn, or 50.2 per cent.

This show that the removal of petrol subsidy created significant fiscal space but did not produce a pool of idle cash for the Federal Government.

Instead, the government said the resources were absorbed by rising wage costs, debt servicing, infrastructure spending and other obligations arising from the same economic reforms.

Put differently, for every N100 the Federal Government generated in additional resources, it spent about N150, leaving about one-third of the expenditure to be funded from its existing revenue base.

The development came as the Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, disclosed that the removal of petrol subsidy and the unification of the foreign exchange market mobilised N15.8tn in additional resources for the Federation during the period.

However, the government received only N5.4tn, representing 34 per cent of the subsidy savings, while the states received N6.5tn and local governments got N3.9tn under the Federation Account allocation formula.

These figures were contained in the Federal Government’s Nigeria Reform Scorecard titled, “The Benefits, Costs and Harm Prevented”, released on Wednesday. The purposes of the news conference was to provide Nigerians with clear and factual information on the savings arising from the removal of the foreign subsidy and foreign exchange unification.

According to Oyedele, the N15.8tn was not paid into the Federation Account under a heading described as “subsidy savings.”

Instead, he said the combined effect of the petrol subsidy removal and foreign exchange reforms increased the naira value of revenues accruing to the Federation.

“Between June 2023 and December 2025, subsidy savings mobilised a sum of N15.8tn in resources for the Federation,” Oyedele said.

“Many people will say, ‘Where is the subsidy saving?’ As a matter of fact, there wasn’t any line in the Federation Account with the description, ‘subsidy savings.’

“So, the subsidy savings showed up in the form of higher collection by Customs because, for every one dollar of import duty before, at N460, it became one dollar at N1,004, N1,003, N1,005.

“The NRS, Petroleum Profit Tax that it collected before, same dollar, higher amount in naira. So, the savings showed up in the Federation accounts by way of higher revenue collections as a result of the reforms.”

The minister said the additional fiscal resources were not generated by the petrol subsidy removal alone, arguing that the foreign exchange reforms also ended what he described as an implicit subsidy that had created opportunities for rent-seeking.

He said, “Not just the subsidy removal, but also the exchange rate flotation, because we were subsidising the exchange rate. And that subsidy was not going to the ordinary person or manufacturers. It was going to rent-seekers.”

The Finance Minister explained that although the removal of petrol subsidy generated N15.8tn in savings for the Federation between June 2023 and December 2025, only N5.4tn, or 34 per cent, accrued to the Federal Government.

The balance was shared among the states and local governments under the statutory Federation Account allocation formula.

According to the scorecard, states received N6.5tn, representing 41 per cent of the total subsidy savings, while the 774 local government areas received N3.9tn, or 24 per cent.

The Federal Government also generated N3.1tn in additional independent revenue, mainly from increased remittances by government-owned entities, while N11.9tn came from additional borrowing.

This brought the Federal Government’s total incremental resources to N20.4tn, of which borrowing accounted for 58 per cent, subsidy savings 27 per cent and other revenue 15 per cent.

Of the N30.64tn in total incremental expenditure during the 31-month period, N9.39tn was spent on wage adjustments, including the increase in the national minimum wage, wage awards and allowances for public servants.

Another N9.37tn was spent on additional external debt servicing resulting from the depreciation of the naira, while N6.47tn went into strategic infrastructure development.

The three items alone accounted for about N25.22tn, or more than 82 per cent of the total incremental expenditure.

The remaining spending included N3.14tn in additional electricity subsidy costs, N1.24tn in increased domestic debt servicing linked to higher interest rates, N423.8bn for social welfare transfers and N419.1bn for the Federal Capital Territory, Ecological Fund, Natural Resource Fund and other interventions.

The government also spent N201.26bn on the higher naira cost of foreign obligations.

He said, “In addition, the Federal Government earned incremental independent revenue of

N3.1tn, principally remittances from government-owned entities while N11.9tn came from incremental borrowing, a figure that would have been far higher, and economically destabilising, without the fiscal space the reforms created.

“Altogether, the Federal Government’s incremental resources over the period came to N20.4tn. That money did not sit idle, it partly funded incremental expenses of N30.64tn. Of this, N9.39tn went to wage adjustments, minimum wage increases and allowances for public servants; N9.37tn went to external debt service made necessary by exchange rate depreciation; and N6.5tn went into strategic infrastructure, making the top three expenditure lines. Every naira of this is accounted for, and the breakdown is in the scorecard we are releasing today.

“Put another way: of the N20.4tn, 58 percent came from borrowing, 27 per cent from subsidy savings, and 15 per cent from other revenue. Against total incremental spending of N30.64 trillion, two-thirds was funded by these new resources, while the remaining third, about N10tn, came from the existing revenue base, despite ending the excessive printing of naira. That, in itself, is evidence of improved public financial management.”

He added, “Every naira of this is accounted for, and the breakdown is in the scorecard we are releasing today.”

The latest disclosure provides a detailed answer to the question that has followed the removal of petrol subsidy since President Bola Tinubu announced the policy on May 29, 2023: where did the savings go?

Tinubu had promised that money previously spent on subsidy would be redirected towards investments and programmes that would benefit Nigerians, including infrastructure, education and other social interventions. In a July 2023 national broadcast, the President said more than N1tn had been saved within the first few months of the policy and pledged that the resources would be used “more directly and more beneficially” for Nigerians.

However, the administration faced persistent public demands for a clear account of the savings as inflation, transport costs and other living expenses surged after the subsidy removal.

Last month, Oyedele acknowledged that the question was legitimate and promised to publish a comprehensive breakdown of the subsidy savings and their utilisation. He explained that the money was not kept in a separate savings account but was absorbed by higher government obligations, particularly debt servicing, wages and social interventions.

The new scorecard appears to be the government’s most detailed accounting yet of the resources generated by the reforms and how they were deployed.

It also underscores a central contradiction in the post-subsidy fiscal narrative: while the removal freed trillions of naira for the Federation, the Federal Government’s share was significantly smaller than the headline savings figure, and its new expenditure still outpaced its additional resources by more than N10tn.

Oyedele argued that the difference was partly financed from the existing revenue base and reflected improved public financial management, rather than a return to heavy monetary financing.

The government also maintained that the reforms prevented a deeper fiscal and economic crisis, arguing that debt service had fallen relative to revenue and that states which previously struggled to pay salaries now had improved fiscal capacity.

Oyedele said the scorecard was not designed to claim that the reforms had come without costs.

“We invited you here today not to declare a victory, but to give an account,” he said.

“For the past three years, the administration of President Bola Ahmed Tinubu has embarked on major reforms to address age-long economic challenges, the removal of a fuel subsidy that was quietly bankrupting the country, and the unification of an exchange rate system that had become a source of arbitrage, distortion and corruption rather than stability.”

He added, “Those decisions came at a real cost, and we are not here to pretend otherwise. Prices rose. The naira adjusted sharply. Households and businesses felt it, and many still do.”

The Federal Government said the scorecard was intended to show not only what the reforms generated, but also what the administration believes Nigeria would have faced if the subsidy regime, multiple exchange rates and unchecked Ways and Means financing had continued.

Also speaking, the Minister of Information and National Orientation, Mohammed Idris described the decision to remove the fuel subsidy as one of the most significant and difficult economic reforms undertaken by the Tinubu administration, acknowledging that it had imposed real costs and adjustments on households, businesses and communities.

He, however, said the reforms were necessary to redirect resources previously committed to an unsustainable subsidy regime towards investments capable of delivering greater and more sustainable value to Nigerians.

“Citizens have a right to know what resources have been freed up, what these resources mean for the Federation, and how the benefits of reform are being translated into tangible improvements in their lives,” the minister said.

Also in his remarks, the Minister of Budget and Economic Planning, Senator Abubakar Atiku Bagudu, provided further context on the rationale for the reforms, noting that President Tinubu inherited an economy with one of the world’s lowest revenue-to-GDP ratios and, consequently, limited fiscal capacity relative to Nigeria’s population and developmental needs.

Bagudu said the administration had to make bold and difficult choices to address fiscal leakages, restore confidence in the economy and create greater room for investment in security, infrastructure, human capital development and grassroots development.

He said President Tinubu chose to confront the economic realities he inherited rather than apportion blame, drawing lessons from international experience in pursuing the difficult reforms required to place the Nigerian economy on a more sustainable footing.

The minister said the reforms had also been accompanied by interventions to cushion their effects on vulnerable Nigerians, stressing that increased revenues would provide government with greater capacity to discharge its constitutional and developmental responsibilities.

He noted that resources generated and mobilised through the reforms were being invested in projects and programmes across the six geopolitical zones, adding that improved connectivity, security, infrastructure and economic opportunities would ultimately benefit Nigerians across the Federation.

Source: punchng.com

FOLLOW US ON:

FACEBOOK

TWITTER

PINTEREST

TIKTOK

YOUTUBE

LINKEDIN

INSTAGRAM

The Federal Government, 36 states and 774 local government councils shared a record N3.007tn from the Federation Account in July 2026, the highest monthly FAAC allocation ever recorded, as stronger statutory revenue pushed the amount available for distribution above the N3tn mark for the first time.

The statutory collections rose by N658.09bn, driven by improved receipts from petroleum and non-oil taxes. The disbursement was approved at the August 2026 meeting of the Federation Account Allocation Committee held in Owerri, Imo State.

The PUNCH reports that the N3.007tn distributed in July is the highest monthly FAAC allocation recorded in 2026 and the largest allocation in the reviewed FAAC records from 2019 to July 2026.

A statement issued on Tuesday by the Director of Press and Public Relations in the Office of the Accountant-General of the Federation, Bawa Mokwa, said the gross statutory revenue rose to N4.359tn in July from N3.700tn recorded in June.

The increase represented N658.087bn, or 17.8 per cent, signalling stronger collections across several oil and non-oil revenue sources. However, gross Value Added Tax revenue declined marginally to N793.968bn in July from N799.746bn in the preceding month, representing a decrease of N5.778bn, or 0.7 per cent.

The statement read, “In its regular monthly business, FAAC approved the disbursement of a total of N3.007tn to the Federal Government, the 36 state governments and the 774 Local Government Councils as revenue for July 2026.

“The month’s figures point to a strengthening underlying revenue base. Gross statutory revenue rose to N4.359tn in July 2026, up N658.087bn, a 17.8 per cent increase, from N3.700tn in June 2026, reflecting improved collection performance across oil and non-oil statutory sources. Gross VAT revenue held broadly steady at N793.968bn, a marginal decline of N5.778bn (0.7 per cent) from N799.746bn in June, suggesting consumption-tax receipts remain resilient month-on-month.”

The communiqué showed that Petroleum Profit Tax, Hydrocarbon Tax, Companies Income Tax, Capital Gains Tax, Stamp Duty Tax, petroleum royalties, mineral royalties, excise duty and gas flaring penalties recorded increases during the month.

The gains, however, were partly offset by declines in VAT, import duty, CET levies, rental of gas flaring fees and miscellaneous oil revenue. “The committee will continue to monitor as it works with revenue-generating agencies to close collection gaps and improve remittance discipline,” Bawa stated.

The development comes amid a sustained rise in revenues accruing to the Federation Account following major fiscal reforms, including the removal of petrol subsidy, foreign exchange reforms and efforts to widen the tax base.

Beyond the monthly allocation, the Owerri meeting also shifted attention to a broader question confronting the country’s three tiers of government: whether rising federation allocations would translate into stronger state economies, improved infrastructure and better social services.

The FAAC meeting, which was held on the sidelines of the National Council of Federation and Economic Development, brought together finance commissioners and accountants-general to discuss the fiscal health of the federation and ways of converting recent revenue growth into long-term economic strength.

Bawa said government officials were urged to focus on six key areas described as vital to fiscal fitness, including improving the quality of internally generated revenue, strengthening and commercialising public assets, expanding economic activity, attracting private capital, investing in human capital and improving transparency in public finance.

States were also encouraged to use the period of stronger revenue to build comprehensive asset registers, verify payrolls and ensure the timely publication of audited accounts.

“The FAAC convened its August 2026 meeting in Owerri, the Imo State capital, on the margins of the ongoing National Council of Federation and Economic Development, pairing the Committee’s routine monthly business with a broader push to strengthen fiscal fundamentals across Nigeria’s federating units.

“The FAAC session discussed the state of the economy, fiscal governance, and federal and subnational fiscal fitness. The session set out the scale of the recent revenue windfall and called for deliberate reform to convert it into durable fiscal strength rather than a temporary gain. The meeting noted that gross FAAC have risen significantly over the past three years, driven by subsidy removal, exchange-rate unification and tax reform,” the statement added.

The meeting further highlighted changes introduced under the Nigeria Tax Act 2025, which took effect from January 1, 2026, and altered the distribution of VAT revenue among the tiers of government.

Under the new framework, the states’ share of VAT revenue increased from 50 per cent to 55 per cent, while the Federal Government’s share declined from 15 per cent to 10 per cent.

The new arrangement also provides that 30 per cent of the states’ VAT pool should be distributed according to the place of consumption rather than the location of a company’s registered headquarters.

The change is expected to create a stronger link between economic activity within a state and the revenue it receives from the Federation Account, potentially increasing competition among subnational governments to attract businesses and expand their economies.

The committee also reaffirmed its commitment to the full and timely remittance of collectible revenues by Ministries, Departments and Agencies into the Federation Account.

It stressed the need to diversify government revenues beyond crude oil and said solid minerals and other non-oil royalty streams would remain areas of focus as the federation seeks to build a more resilient revenue base.

The committee noted that sustaining the strong statutory revenue recorded in July would depend on improved collection and remittance discipline by revenue-generating agencies.

It added that the challenge for governments was no longer merely to share rising revenues but to ensure that the additional funds were converted into productive investments capable of strengthening public finances and improving living standards.

The meeting therefore urged the Federal Government and the states to use the current period of revenue growth to institutionalise reforms that would make federation allocations more predictable while building stronger foundations for long-term economic development.

“The committee noted that sustaining the statutory revenue gains recorded in July 2026 will depend on continued discipline in collection and remittance across Ministries, Departments and Agencies, and reiterated its support for reforms aimed at improving the predictability and growth of allocations to all three tiers of government,” the statement concluded.

The PUNCH reports that FAAC distributed N1.96tn in January, N1.89tn in February, N2.04tn in March, N2.25tn in April, N2.30tn in May and N2.55tn in June.

The total amount distributed between January and June 2026 stood at N12.99tn. With the latest July allocation of N3.007tn, the Federal Government, 36 state governments and 774 local government councils have collectively received N15.997tn from FAAC so far in 2026.

Source: punchng.com

FOLLOW US ON:

FACEBOOK

TWITTER

PINTEREST

TIKTOK

YOUTUBE

LINKEDIN

INSTAGRAM

The Federal Competition and Consumer Protection Commission has said its preliminary investigation into Nigeria’s cement industry suggests possible manipulation of cement prices, following widespread complaints over the soaring cost of the commodity despite the country’s large production capacity and abundant limestone deposits.

It has also opened an investigation into possible price manipulation in Nigeria’s cement industry after a three-month inquiry raised concerns that prevailing market conditions may not fully explain the cost of the building material.

The preliminary findings followed a cross-border study conducted by the commission’s Anticompetitive Practices Department in response to widespread complaints over the rising cost of cement.

In a statement issued on Tuesday by the FCCPC Director of Corporate Affairs, Ondaje Ijagwu, the commission said its investigation compared Nigeria’s cement market with those of Kenya, Tanzania, South Africa, Egypt, Morocco, Algeria and Togo.

An analysis of findings in the FCCPC report showed that the cost of cement in Nigeria is higher than the prices of the same quantity of the commodity in neighbouring African countries.

This, however, came as building sector leaders and economists explained that the factors behind the high cement prices in Nigeria are compounded.

The study examined the availability of limestone, population, production capacity, consumption and retail prices. The statement read, “Findings from an industry-wide investigation conducted by the Federal Competition and Consumer Protection Commission suggest possible manipulation of prices of cement in the Nigerian market.

“This is the preliminary summation of the 40-page field reports collated following a three-month cross-border study by the Anticompetitive Practices Department of the Commission, undertaken in response to widespread public complaints over the high cost of cement, a common staple in the country’s construction industry.”

The commission noted that Nigeria has substantial limestone deposits and installed cement production capacity estimated at between 60 million and 65 million metric tonnes annually, against domestic consumption of about 25 million to 30 million metric tonnes.

Despite the reported excess capacity and Nigeria’s position as a net exporter to neighbouring countries, the commission said domestic prices had continued to rise.

Market intelligence reviewed by the FCCPC showed that a 50kg bag of cement, which sold for between N9,300 and N9,700 in January, rose to between N10,500 and N13,000 by mid-year. By July, prices of between N13,000 and N15,000 were reported in some parts of the country.

The commission also found that cement sold at lower prices in some African markets. In Kenya, where the population is about 58.6 million and cement demand was estimated at 9.3 million metric tonnes in 2025, a bag sold for about $5.40, or N7,344.

In Tanzania, with a population of about 66.3 million and similar cement demand, a bag sold for about $4.80, or N6,528. In Togo, which the commission said has no limestone deposits, cement retailed at about $6.75, or N9,180 per bag.

The FCCPC said the price disparity had raised questions about why Nigeria’s significant production capacity and raw material endowment had not translated into greater downward pressure on prices.

It said industry players had attributed the high prices to energy costs, naira depreciation, imported machinery and spare parts, as well as transportation and logistics expenses.

However, the commission said it was testing those explanations against verified information on production costs, pricing, capacity utilisation and other market conditions.

“Of particular concern to the commission is that this level of production capacity has not resulted in the downward pressure on domestic prices that might ordinarily be expected in a competitive market with substantial excess capacity.

“Information provided by industry participants has identified energy costs, depreciation of the Naira and its effect on imported machinery and spare parts, as well as transportation and logistics costs, among the factors contributing to cement prices.

“The commission is testing these explanations against verified information on costs, production, pricing and market conditions. However, the weight of preliminary findings provides sufficient grounds for the investigation to continue,” the statement said.

The FCCPC said the preliminary findings provided sufficient grounds to continue the investigation and determine whether cement prices were driven by legitimate costs or by anti-competitive practices.

The probe will examine possible coordinated conduct, abuse of market power, restriction of domestic supply and anti-competitive distribution practices.

Accordingly, the commission has issued Notices of Commencement of Investigation and Summons to Produce to key players in the sector, demanding records on pricing methodologies, production, capacity utilisation, exports and commercial relationships.

“Next is to determine whether prevailing cement prices can be explained by legitimate costs and market conditions, or whether there is evidence of coordinated conduct, abuse of market power, restriction of domestic supply, anti-competitive distribution practices or other conduct contrary to the provisions of the FCCPA,” it added.

Commenting, the Executive Vice Chairman and Chief Executive Officer of the FCCPC, Tunji Bello, said the investigation was necessary because of cement’s strategic importance to the economy.

“Cement occupies a strategic place in the Nigerian economy. Its price affects the cost of building a home, developing commercial property, delivering public infrastructure and, ultimately, the cost of doing business. When concerns persist about how such an important market is functioning, the Commission has a duty to look beyond assumptions and establish the facts,” Bello said.

He stressed that the investigation was not aimed at dictating how companies should conduct their businesses or limiting legitimate profits.

“Businesses are entitled to make legitimate commercial decisions and earn returns on their investments. Competition law does not prevent that. Its purpose is to protect the competitive process, so that prices, output and other market outcomes are determined by genuine competition rather than conduct that unlawfully restricts it,” Bello said.

The investigation comes amid growing pressure on the construction sector, where rising cement prices have increased the cost of housing and infrastructure projects across the country.

OPS, economists react

Building sector leaders and economists explained that the factors behind the high cement prices in Nigeria are compounded; on the one hand, it is largely structural, including transportation of limestone on impassable roads, and on the other hand, it could be influenced by monetary policy, including taxes.

They noted that there is only so much that the FCCPC could do, especially because any government intervention risks could impact free trade.

In separate phone interviews with The PUNCH, business leaders including the Chairman of the Lagos Chamber of Commerce and Industry Construction Group, Soji Adeniji, explained that his experience in a recent project confirmed the FCCPC report

He said, “I was in Canada recently, and a friend of mine who is having a project in Canada was contemplating buying cement from abroad. He was of the opinion that, why can’t we buy cement from Nigeria, as in he wants to import cement from Nigeria and stuff like that.

“By the time he did his calculations, he found out that cement is not as cheap in Nigeria, and that we could arrange for the importation. Eventually, as the report stated, he found out that Turkey is more price-friendly. He was able to establish a relationship with Turkey. Of course, the Tanzania, Kenya market too was a bit preferable, which boils down to the fact that the price of cement in Nigeria is high. But then the question would be, what is the location of that kind of high cost?”

Adeniji also acknowledged that the cement market in Nigeria is experiencing a moment of scarcity, but noted that the given reasons may not be as satisfying.

“Why are we having scarcity? Some people are saying because it was raining and therefore limestone deposits, well, that is not, I mean, for me, for the past two weeks now, since the beginning of August, there has not been much rainfall to affect any production. But what is happening to the limestone would be another thing,” the LCCI construction group leader stated.

He noted that other business factors could play a role, adding, “If you check the production line and look at that production chain line, you look at it from limestone to the facility that is an infrastructure facility for production.

“You look at the economy, which is stable, so we cannot be saying that things are changing. The economy is stable, and has been consistent for too long a time. Then other challenges, maybe with the manufacturer.

“You’d notice that Lafarge has just changed. A company called HBM has just bought over Lafarge, meaning that maybe the management issue or something like that. So, when you look at that production, up to the level of distribution, you’ll ask again, why are we experiencing this? They will be telling you logistics, transportation for delivery, and that kind of thing.

He noted that taxation could be another factor. “Some people from the manufacturer’s side too might be talking about the issue of double taxation, and things like that. If the tax regime is not favorable, there’s nothing definite.”

These experts urged the government to invest in improving supply to meet increasing demand, which may have caused exorbitant prices. They recommended working with researchers and the private sector to develop alternatives to cement for concrete making.

On his part, Professor of Economics and Public Policy, University of Uyo, Prof Akpan Ekpo, said the housing sector, the housing sector, is a very crucial part of investment where the cement issue could be a supply problem. He said, “This could be more demand than supply. So what the government should do is that you look at that sector properly and see whether you can help that sector.

Ekpo called on the government to help people who need access to finance in order to be in the cement business. “Otherwise,” he said, “you’d keep having this problem of high cost of cement.”

A member of the Nigerian Institute of Building and Yaba College of Technology researcher, Samuel Shonibare, said, “I urged the government to look for alternatives to the use of cement in construction. There has been a lot of research that studied other materials that can be used to replace cement partially in concrete production.

“I’m trying to look at the probability of using rice shells as partial replacements for cement in concrete production. It’s one research project I’m currently working on. Not that I’m even trying, I’m on it.

He explained that if the country reduces the use of cement in construction, of course, there will be a drastic reduction in the price of cement that is being used in construction. “So the recommendations I would make for now is telling the stakeholders in the construction industry to focus on research that will yield an alternative material to cement. If the producers of cement have discovered that there’s a shift in the usage, I think that will lead to a reduction in the price,” Shonibare noted.

Meanwhile, the Chief Executive Officer of the Centre for Promotion of Private Enterprise, Dr Muda Yusuf, urged the government to carry out more rigorous research to ensure a detailed solution.

He said, “In order for a balanced view, it is important to hear from the FCCPC what the producers and distributors of cement have to say. Secondly, we need to know the cost structure of the cement producers and suppliers in the foreign countries. It will help us gain clear insight.”

Yusuf noted that understanding what factors impact the pricing of cement in the other countries will enrich the FCCPC inquiry.

He added, “The report needs to be more rigorous and show us the cost structure in the other countries. We need to know their cost of production, taxes, logistics and energy. Having the factors that underlie the prices will help (the probe), since it is presented as a comparative report.”

Source: punchng.com

FOLLOW US ON:

FACEBOOK

TWITTER

PINTEREST

TIKTOK

YOUTUBE

LINKEDIN

INSTAGRAM