Subsidy Is Gone, But Borrowing Continues: What Tinubu’s Critics Are Leaving Out
By Adeboye Adebayo
A recent article by John Adesogan questions why Nigeria continues to borrow despite President Bola Ahmed Tinubu’s decision to remove petrol subsidy shortly after assuming office in May 2023. His central argument is that if subsidy removal was intended to free up government resources, continued borrowing raises questions about where the savings have gone.
It is indeed a right questions to ask as countryman and Nigerians actually deserve to know how public money is raised, allocated and spent. However, the argument that subsidy removal should have ended government borrowing does not fully reflect how public finances work.
The discussion must begin with a fundamental fact that the savings from subsidy removal did not belong to the Federal Government alone.
According to the Federal Ministry of Finance’s August 2026 economic reform scorecard, Nigeria recorded an estimated ₦15.8 trillion in subsidy savings across the federation between June 2023 and December 2025. Of that amount, the Federal Government’s estimated share was ₦5.43 trillion. State governments received approximately ₦6.52 trillion, while local governments received about ₦3.88 trillion.
The money was distributed across the tiers of government through the federation’s allocation arrangements. It was not one large pool of cash placed at President Tinubu’s disposal.
This fact must be stated loud and clear. State governments have responsibilities for roads, schools, hospitals, salaries, pensions and other public services. Local governments also have obligations to meet. The additional allocations created more resources for these responsibilities, although the extent to which citizens have benefited must be assessed through the actual spending and results of each government.
It is therefore misleading to assume that the entire ₦15.8 trillion was available to the President and that every subsequent loan represents a failure to account for that amount.
Removing petrol subsidy was intended to reduce a major recurring fiscal burden and ease pressure on public finances. It was not a declaration that Nigeria would never borrow again.
Government expenditure extends beyond fuel subsidy. Nigeria must pay workers, meet statutory obligations, finance security, service existing debts and invest in infrastructure and public services. When available revenue falls short of these obligations, borrowing remains one of the financing options available to government.
The more important question is whether the borrowing is necessary, responsibly managed and used for purposes that justify its long-term cost which President Bola Tinubu’s administration monitoring closely.
The Federal Ministry of Finance’s reform scorecard provides figures relevant to this debate. It estimates that the Federal Government had approximately ₦20.4 trillion in incremental resources during the period under review. This comprised ₦5.43 trillion in its share of subsidy savings, ₦3.12 trillion in other incremental revenue and ₦11.85 trillion in additional borrowing.
Against this, the ministry reported approximately ₦30.64 trillion in additional expenditure pressures.
The ministry identified wage adjustments, minimum wage increase, the increased naira cost of servicing existing foreign-currency debt, infrastructure investment, electricity support and other obligations among the factors contributing to the additional expenditure.
This offer a fiscal explanation for why subsidy removal did not eliminate the need for additional financing.
The Debt Management Office reported total public debt of ₦159.28 trillion as of December 31, 2025. The figure rose from ₦144.67 trillion at the end of 2024.
The composition of the debt, the cost of servicing it, the purposes for which new funds were raised and the benefits generated by the expenditure had several times explained by the government.
A rise in the naira value of public debt is not automatically equivalent to the amount of fresh cash borrowed and spent during the same period. Exchange-rate movements can affect the naira value of existing foreign-currency obligations, while refinancing and other debt-management transactions must also be distinguished from new borrowing.
A serious assessment must separate these factors rather than treat every increase in the reported debt stock as evidence that the government has simply taken and spent more money, Nigerians need to judge those decisions with the correct figures.
The government has overtime explained why it borrowed and demonstrated what the borrowing achieved. The funds are being used for productive infrastructure, improved public services and investments capable of supporting economic growth.
John Adesogan is right to ask where the money went and what Nigerians are getting in return. Those questions should not be avoided.
But the conclusion that subsidy removal has failed simply because borrowing continued does not follow automatically from the evidence. The entire subsidy saving was not retained by the Federal Government, and the government continued to face expenditure obligations that required financing.
The more useful debate is whether subsidy removal reduced the fiscal burden that would otherwise have existed, whether the savings were properly distributed and whether the additional borrowing has produced sufficient public value.
President Tinubu’s administration should be judged on the evidence; the resources released, the expenditure incurred, the debt accumulated and the results delivered to Nigerians.
The removal of subsidy was not a promise that Nigeria would never borrow again. It was a decision intended to ease fiscal pressure. The government has demonstrated with transparent accounts and measurable results, that the decision has made public finances more sustainable and improved the lives of citizens.
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