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According to the Nigerian Ministry of Finance Reform Scorecard published on finance.gov.ng, between June 2023 and December 2025, the Federal Government of Nigeria generated N20.4 trillion in incremental resources.

This came from three sources: the Federal Government’s share of fuel subsidy savings (N5.4 trillion), other incremental revenues mainly from government-owned entities (N3.1 trillion), and additional borrowing (N11.9 trillion).

The Federation recorded N15.8 trillion in subsidy-related savings after removing the petrol subsidy. Of this amount, states and local governments received the larger share of N10.4 trillion, while the Federal Government kept N5.4 trillion.

The Federal Government then deployed N30.64 trillion in incremental expenditure over the same 31-month period. The three largest items funded were minimum wage increases and allowances for public servants (N9.39 trillion).

This wage adjustment exceeded the entire federal share of subsidy savings. Other main expenditure heads were external debt service driven by naira depreciation (N9.37 trillion) and strategic infrastructure (N6.5 trillion).

Again, from the total deployments, Social welfare transfers received only N424 billion. Of that modest sum, NELFUND—the student loan scheme—got N223.8 billion. In percentage terms, social welfare absorbed roughly 2.1% of the Federal Government’s incremental resources. Education, through NELFUND, received just 1.1%.

I have a few observations.

Social welfare underfunded

First, this paltry allocation to education raises a fundamental question of prioritisation. A developing nation like Nigeria, with one of the world’s highest numbers of out-of-school children, chose to spend almost forty times more on public-sector wages than on education support during a period of fiscal reform.

A developing country cannot build lasting prosperity without massive investment in its people. Education and health are not residual items to fund after salaries and debt are settled; they are the foundation of future productivity. Brazil offers a useful contrast.

When the country discovered significant pre-salt oil reserves, it passed legislation (Law 12.858 of 2013) directing 75 per cent of royalties from new contracts to education and 25 per cent to health. The deliberate choice was to convert a finite natural resource into permanent human capital. Nigeria, facing similar resource constraints and a far larger youth population, took the opposite route.

Disbursements not tagged and ringfenced

Also, why were the proceeds of subsidy removal not ringfenced and then shared? In the past, Nigeria has used dedicated mechanisms such as the Petroleum Trust Fund (PTF) to ensure transparency and trackable outcomes. Ringfencing the savings and sharing them with states under clear guidelines would have allowed citizens to follow the money.

A good example is how the FGN tags funds raised for Sukuk. Instead, the funds flowed into the general Federation Account and were distributed according to the existing formula. Once in the general pool, political pressure to meet salary obligations and service debt quickly took over.

What about PMS subsidy paid by NNPC

Another gap in the Scorecard is how it treats NNPC’s ongoing energy costs. According to NNPC’s 2024 audited annual financial statements, the company recorded N7.13 trillion as “energy security expense” in 2024 alone (up from N4.8 trillion in 2023).

This amount, which covers under-recovery arising from the difference between actual import costs and regulated pump prices, was charged against Federation remittances. These off-balance-sheet obligations effectively represent a continuation of subsidy by another name. They are not fully reflected in the official Reform Scorecard. Their exclusion leaves an incomplete picture of the true fiscal cost of energy pricing policy.

Use of borrowed funds

The Scorecard also shows that a substantial portion of the incremental resources came from new borrowing. This raises a difficult but necessary question: Is it appropriate for a government to borrow to pay salaries or service existing debt? In principle, borrowing should finance productive assets that generate future revenue or growth. Using debt to meet recurrent obligations risks locking the country into a debt cycle where more borrowing is required to keep the system running. Higher salaries compound the problem.

With wages already raised for ASUU and the military and further negotiations expected, the recurrent wage bill will keep rising.

If oil revenues remain below budget assumptions and non-oil growth stays modest, the government may find itself borrowing at high interest rates to meet payroll and debt service in the future. That is the classic definition of a debt trap.

Other inconsistencies also stand out. Infrastructure received a meaningful allocation, yet many of the listed projects are multi-year commitments whose economic returns will take time to materialise. Meanwhile, social welfare and education—areas that can deliver quicker improvements in productivity and social stability—remained on the margins. Electricity subsidy support still absorbed N3.14 trillion, showing that price interventions did not disappear; they merely changed form.

Should the PMS subsidy have been removed?

Was the removal of fuel subsidy a good idea if a large part of the resulting fiscal space ended up funding civil servant salaries? The answer depends on what one believes reform’s purpose to be.

If the goal was to stop a leaky and corrupt subsidy regime, then removal was necessary. If the goal was to free resources for transformative investment in human capital and productive infrastructure, then the subsequent allocation decisions fall short.

Nigeria’s federal public service currently stands at approximately 720,000 personnel, according to the Bureau of Public Service Reforms, after eliminating about 70,000 ghost workers through the IPPIS system. Supporting this workforce with higher wages is politically understandable. Whether it represents the highest-return use of scarce reform resources in a country with deep education and skills deficits is another matter.

The Reform Scorecard is valuable because it provides numbers. The numbers, however, reveal a familiar pattern.

When additional resources become available to the Nigerian state, the first claims are salaries and debt service, not targeted social welfare for the larger population, which remains residual.

Until Nigeria changes this spending hierarchy, higher revenue alone will not deliver the development outcomes the country needs. More money is useful. Better spending choices are essential.