By The ABT NEWS Editorial Desk
ABUJA — The Federal Government continues to promote a narrative of fiscal salvation, attributing ₦15.8 trillion in “savings” to the removal of the petrol subsidy and sweeping foreign exchange reforms between June 2023 and December 2025. However, a dispassionate examination of the macroeconomic data and the grim reality facing local enterprises reveals a hollow victory. Rather than providing a lifeline to the real economy, the administration’s policies have triggered rampant inflation, escalated national debt, and placed Nigerian businesses in a painful stranglehold.
The Mathematical Disconnect: A ₦10 Trillion Black Hole
The government’s scorecard, presented by Taiwo Oyedele, claims that incremental resources from subsidy savings, independent revenues, and ₦11.9 trillion in additional borrowing amounted to ₦20.4 trillion.
Yet, in the same breath, the administration admits to an incremental expenditure of ₦30.64 trillion over the same period. This glaring discrepancy leaves a ₦10.24 trillion funding gap. If total incremental resources were capped at ₦20.4 trillion, how did the government finance an extra ₦10 trillion in spending? The math suggests a heavy reliance on unrecorded borrowing or inflationary money printing (Ways and Means), neutralizing any claims of fiscal prudence. While ₦9.39 trillion was spent on wage adjustments and allowances, this covers less than a third of the new spending, leaving the public in the dark about how the bulk of the so-called “fiscal space” was actually utilized.
Stifling the Real Economy: Hyperinflation and the SME Crisis
The celebration of increased customs and petroleum profit tax collections is fundamentally flawed. The government acknowledges these gains are largely due to the “naira value of dollar-denominated transactions” rising after exchange rate reforms. This is not economic growth; it is a devaluation tax.
For local manufacturers and small-to-medium enterprises (SMEs), these policies have been devastating. The removal of the fuel subsidy directly catalyzed a severe spike in production and transportation costs. According to data cited from the National Bureau of Statistics, headline inflation hit a nearly two-decade high of 34.19% by mid-2024. Furthermore, economic analyses indicate that every unit increase in subsidy removal has driven up the cost of living and inflation by an estimated 73.8%. Local businesses are forced to absorb exorbitant energy costs and a decimated Naira, leading to shrinking profit margins, widespread closures, and alarming unemployment rates.
The Debt Trap: Working for Creditors, Not Citizens
Perhaps the most damning critique of the government’s fiscal strategy comes from the realities of its debt burden. While the administration claims the reforms prevented bankruptcy, the “fiscal gains” have been overwhelmingly swallowed by debt obligations.
As warned by CFG Advisory, Nigeria’s debt servicing costs for 2026 are projected to surpass a staggering ₦15 trillion, an amount exceeding allocations for critical sectors like education, healthcare, and infrastructure. The Federal Government’s own figures reveal that ₦9.37 trillion was eaten up by external debt servicing during the 30-month period, driven largely by the sharp depreciation of the Naira.
If ₦15.8 trillion in subsidy “savings” still necessitates ₦11.9 trillion in new borrowing just to maintain operations, then just know that the reforms are not curing the underlying economic disease. They are merely transferring the cost from the government’s balance sheet onto the balance sheets of struggling local businesses and ordinary Nigerians. And that is unsustainable in the long run. Pretty soon, the chicken will come home to roost with devastating consequences for Nigeria and all Nigerians!
By
