The real measure of subsidy removal is not a savings account. It is whether the fiscal space it creates produces a more productive and prosperous Nigeria.
Every major economic reform leaves behind two conversations.
The first asks what was lost.
The second asks what was gained.
In Nigeria’s case, much of the debate over fuel subsidy removal has focused on what was lost.
Petrol became more expensive. Transport costs increased. Food prices rose. Families experienced genuine hardship. Those realities cannot and should not be denied.
But there is another question we have not asked nearly enough: What should Nigeria have to show for removing fuel subsidy?
That is a fundamentally different question. It moves the debate from accounting to development. Before President Bola Ahmed Tinubu announced the removal of fuel subsidy on 29 May 2023, the policy had already been studied for decades by economists, public-finance experts, multilateral institutions and researchers.
The debate was never entirely black and white. One school of thought viewed subsidy primarily as social protection. Its supporters argued that it reduced transport costs, moderated the impact of global oil-price shocks and provided some relief to households already struggling with poverty and weak social protection.
Another viewed cheap petrol as a form of resource entitlement: Nigeria produces crude oil, so Nigerians should reasonably expect to enjoy cheaper petroleum products.
The third school accepted the original social objective but argued that the subsidy had become fiscally unsustainable, poorly targeted and vulnerable to corruption, while distorting incentives and diverting resources from more productive uses. I believe each perspective contains some truth.
The problem was not necessarily why the subsidy was introduced. The problem was that Nigeria changed, but the policy did not. Over time, domestic refining capacity deteriorated, dependence on imported petroleum products increased, and the subsidy regime became increasingly expensive and vulnerable to abuse.
The result was a peculiar contradiction: one of Africa’s largest crude-oil producers increasingly depended on importing the petroleum products it consumed.
The subsidy also created incentives that favoured importation over domestic refining. Investigations and reports over the years documented problems ranging from fraudulent claims and weak oversight to rent-seeking and fuel smuggling.
Again, precision matters. I would not argue that subsidy alone destroyed Nigeria’s refineries. Poor maintenance, underinvestment, governance failures, policy inconsistency and other structural problems played major roles.
But subsidy became part of an ecosystem in which imported petrol could remain commercially attractive while domestic refining struggled. That is why the debate eventually shifted from “Was subsidy useful?” to a more difficult question:
“Could Nigeria continue to afford it in its existing form?” By the early 2020s, that question had become increasingly difficult to avoid.
Successive governments faced enormous fiscal pressures, including heavy debt-service obligations. The resources available for infrastructure, education, healthcare, security and other productive investments were consequently constrained.
Yet reform remained politically difficult. The reason was obvious. Removing subsidy meant immediate pain. Transport fares would rise. Food prices would rise. Inflationary pressure would increase. Public anger would follow. For any elected government, that is an uncomfortable political calculation.
There was also a legitimate argument that subsidy reform should have been accompanied by stronger public transportation, expanded social protection, better electricity supply, CNG adoption and targeted support for vulnerable Nigerians.
I agree.
But there was another question: Could Nigeria sustainably finance all these interventions while continuing to commit enormous public resources to subsidising petrol? That is where the debate becomes more complicated. Imagine a bakery where every loaf costs ₦500 to produce but is deliberately sold for ₦200.
Initially, the owner absorbs the ₦300 loss. Eventually, the savings disappear. The owner begins borrowing to maintain the artificially low price. Soon, the borrowing is no longer financing a new oven, expanding the bakery or employing more workers. It is simply financing yesterday’s consumption.
That was increasingly the problem Nigeria faced. There is nothing inherently wrong with borrowing. Major economies borrow. The real question is what the borrowing finances. Borrowing to build productive assets can create future economic value.
Borrowing to finance recurrent consumption does not. A highway can connect farmers to markets for decades. A railway can reduce transport costs. Reliable electricity can increase industrial productivity.
A university can educate generations. But fuel is consumed. Once it is burned, it is gone. That is why I believe Nigerians should broaden the subsidy debate.
Not simply: “Where is the subsidy money?”
But: “What is Nigeria becoming now that subsidy no longer consumes such a significant share of public resources?” There is, however, an important complication that deserves attention.
Fiscal savings do not necessarily appear as cash sitting in a government account waiting to be spent on a road or school. In July 2026, Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, said that savings from fuel-subsidy and foreign-exchange reforms had largely been absorbed by higher debt-servicing costs and increased government expenditure. Reuters reported that he also pointed to substantially higher borrowing costs and increased government spending.
Some may interpret that as evidence that the reform produced no benefit. I think that would be too simplistic. Debt servicing is not the same thing as building infrastructure, and it should not be presented as though it were.
But meeting debt obligations can reduce fiscal and refinancing pressure and help stabilize the finances of the state. Nigeria needs both. We need stronger debt sustainability and greater productive investment.
The danger would be to use every Naira of fiscal space merely to service debt without expanding the productive capacity of the economy. The objective should be a cycle in which improved fiscal management reduces pressure on government finances, creates room for productive investment, expands economic activity, increases revenues and gradually gives government greater capacity to invest.
That is where the success of subsidy reform should ultimately be measured. And it is against that standard that Nigerians should examine what has happened since 2023.
Consider infrastructure.
The Lagos–Calabar Coastal Highway is one of the administration’s major transport projects, stretching roughly 750 kilometers. The Sokoto–Badagry Superhighway is planned as an approximately 1,068-kilometer strategic corridor connecting the far northwest with the southwest.
Then there is the Akwanga–Jos–Bauchi–Gombe–Biu–Maiduguri corridor. The original project was approximately 700 kilometers. In July 2026, President Tinubu approved an additional 400 kilometers, extending the corridor into Taraba State and bringing the planned length to about 1,100 kilometers.
There is also the Calabar–Ebonyi–Benue–Kogi–Nasarawa–Abuja Trans-Sahara Superhighway, designed to strengthen connectivity between the South-South, South-East, North-Central and the Federal Capital Territory. The Federal Government has identified the route as one of its strategic legacy highway projects.
None of these projects should be falsely presented as though they were all invented by the Tinubu administration. Some have histories that stretch back decades. But there is an important distinction between conceiving a project and delivering it.
A project that exists on paper has potential value. A completed road is an economic asset. It can reduce travel time, connect producers to markets, facilitate trade, attract investment and stimulate economic activity. That is the difference between an idea and infrastructure.
Of course, roads alone cannot determine whether subsidy reform succeeds. If all Nigerians receive in return for subsidy removal is more expensive petrol, then the reform has failed to deliver its broader promise.
The dividend must eventually appear in better infrastructure, stronger human capital, improved power supply, better healthcare, more productive businesses and higher household incomes.
Education provides another example.
The Nigerian Education Loan Fund (NELFUND) has become one of the administration’s major human-capital interventions. By June 2026, NELFUND reported that 1.6 million students had directly benefited from the scheme, with ₦282 billion disbursed. The significance is not simply the size of the number.
The larger question is whether Nigeria can move from merely cushioning present hardship towards investing in the capacity of Nigerians to earn, produce and participate more effectively in the economy.
The same principle applies to fiscal transfers to states and reforms in taxation, power, agriculture, education and public finance. They should ultimately be judged by one question: Are they increasing the productive capacity of Nigeria and improving the lives of ordinary Nigerians?
This is where I believe the subsidy debate has often been framed too narrowly. We ask where the money went. Perhaps we should also ask what the country is building because those resources are no longer being committed to subsidising petrol. That does not mean government should be given a free pass.
Far from it.
The hardship caused by subsidy removal is real. Rising transport costs, food prices and the broader increase in the cost of living have placed enormous pressure on Nigerian households. Government therefore has a responsibility to ensure that the benefits of reform eventually reach ordinary Nigerians.
That means stronger social protection, better public transportation, accelerated CNG adoption, improved food production, reliable electricity, better healthcare, quality education and an environment in which businesses can produce and create jobs.
Economic reform is not successful simply because the government makes a difficult decision. It is successful when people’s lives ultimately improve. That is the real test before the Tinubu administration.
President Bola Ahmed Tinubu inherited a subsidy system whose problems had accumulated over several decades. Successive administrations had confronted the same dilemma, with several recognizing the need for reform but repeatedly postponing the political cost.
The Tinubu administration ultimately chose to implement it. But removing subsidy was not the destination. It was the beginning of a much harder journey. The real challenge now is to convert the fiscal and economic space created by reform into lasting productive capacity.
That means building infrastructure that works. Creating jobs that last. Strengthening institutions. Expanding human capital. Reducing the cost of doing business. Improving electricity. And, most importantly, ensuring that ordinary Nigerians eventually feel the benefits of the transformation.
So when Nigerians ask: “Where is the fuel subsidy money?” I think we should ask a bigger question:
“What lasting value is Nigeria creating because fuel subsidy no longer consumes those resources?”
A subsidy is consumed. A bridge remains. A railway can serve generations. A university can educate thousands long after its classrooms are built. A productive highway can connect businesses, farms and markets for decades. That is the difference between financing consumption and financing development.
Fifty years from now, Nigerians may not remember the precise amount spent on petrol subsidy in 2022. But they may remember the roads that connected their communities. The schools that educated their children.
The hospitals that saved lives. The industries that created jobs. And whether the difficult decisions made today helped build a more prosperous Nigeria tomorrow. History rarely remembers consumption. History remembers what a nation builds.
Emmanuel George Ndoma is a researcher in Environmental Radioactivity and Radiation Protection, Public Policy Analyst, and Science Communicator. Beyond scientific research, he is committed to promoting balanced, evidence-based conversations on governance and national development.
In an era when public discourse is frequently shaped by crisis and pessimism, he writes to highlight measurable progress, examine public policy through facts and evidence, and encourage constructive solutions that strengthen institutions and renew confidence in Nigeria’s future.
NB: Opinions expressed in this article are strictly attributable to the author, Emmanuel George Ndoma, and do not represent the opinion of CrossRiverWatch or any other organization the author works for/with.
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