FG’s N20.4trn resource figure raises more questions than answers — Dele Oye
…as new spending commitments hit N30.6trn
…Raises fresh concerns over $5bn Abu Dhabi facility
….Says Nigeria remains heavily dependent on borrowing despite subsidy removal
‘How Naira lost 29% of value in four years’
By Nnamdi Ojiego
The Federal Government’s economic reform figures have raised a fresh fiscal question, with former President of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, NACCIMA, Hon. Dele Oye, drawing attention to the widening gap between the additional resources available to the government and the new spending pressures it has incurred since the removal of fuel subsidy.
Oye, currently Chairman of Alliance for Economic Research and Ethics Ltd/Gte, said the figures presented by the Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, showed that the Federal Government had recorded about N20.4 trillion in incremental resources, against additional expenditure pressures of N30.64 trillion.
The figures, he said, provide a more complicated picture of the fiscal impact of the reforms than the headline figure of N15.8 trillion in subsidy savings suggests.
Meanwhile, he says the Naira value has declined by almost one-third in real terms over four years despite the Central Bank of Nigeria’s (CBN) report that currency-in-circulation rose to a record N5.73 trillion in 2025
According to Oye’s analysis of the Ministry’s reform scorecard, the N20.4 trillion in incremental Federal Government resources comprised N5.43 trillion in subsidy savings, N3.12 trillion in other incremental revenues and N11.85 trillion in incremental borrowing.
Borrowing therefore accounted for about 58 per cent of the stated incremental resources, the analysis noted.
Oye said the distinction was important because borrowing should not be presented as revenue generated by the reforms.
“Borrowing is financing, not internally generated revenue,” he said in the analysis, arguing that the reforms created fiscal space and changed the government’s financing mix rather than generating NN20.4 trillion in free cash.
The analysis also questioned the interpretation of the N15.8 trillion subsidy savings frequently cited in discussions of the reform.
Oye said the figure represented savings across the Federation, with about N5.43 trillion accruing to the Federal Government, N6.52 trillion to states and N3.88 trillion to local governments.
Thus, he said, the removal of the petrol subsidy did not leave the Federal Government with a single N15.8 trillion cash pool. Rather, it reduced a major fiscal burden and changed the distribution of resources through the Federation Account.
N30.64trn spending pressure
The other side of the equation, according to Oye, is the scale of expenditure pressures that followed the reforms.
The Ministry put additional expenditure pressures at N30.64 trillion, including N9.39 trillion for wage adjustments, wage awards, allowances and related personnel costs.
Another N9.37 trillion resulted from the exchange-rate impact on external debt servicing, while N6.47 trillion was allocated to strategic infrastructure and N3.14 trillion to electricity support.
Oye noted that the N9.39 trillion wage-related pressure alone exceeded the Federal Government’s estimated N5.43 trillion share of subsidy savings. He, however, warned against treating the figures as though subsidy savings were simply transferred into workers’ salaries.
“The figures describe different components of a multi-year fiscal adjustment, not a single bank account with four labelled envelopes,” the analysis said.
The figures instead point to a fiscal adjustment in which the government eliminated a major subsidy burden while simultaneously taking on higher wage obligations, infrastructure spending, electricity support and increased debt-service costs.
The result, Oye said, is that Nigeria remains heavily dependent on borrowing even after one of its largest fiscal burdens was removed.
The borrowing question
For Oye, this financing pattern deserves greater public attention because much of the increase in available resources was not generated from new revenue.
The Ministry’s figures show N11.85 trillion in incremental borrowing against N8.55 trillion from subsidy savings and other incremental revenues.
The implication, according to the analysis, is that the reform has provided fiscal room but has not eliminated the underlying revenue challenge.
Oye consequently called for a clearer distinction in government communication between money saved, money earned and money borrowed.
That distinction becomes particularly important in assessing new financing arrangements such as the Federal Government’s approximately $5 billion Total Return Swap facility with First Abu Dhabi Bank.
$5bn facility and the transparency test
While the subsidy figures raise questions about the government’s fiscal position, Oye’s analysis argues that the Abu Dhabi facility presents a separate test of how far the government is prepared to take public disclosure of complex financing arrangements.
The Minister had said the government would publish how it spends government money but would not publish how it was spending money drawn from the Abu Dhabi facility, arguing that there was “nothing special about that loan.”
Oye challenged that position, saying the facility involves public institutions, public collateral and public repayment obligations.
He also pointed to the potential for margin calls and other risks associated with the structure.
According to him, the issue is not whether the facility is inherently improper. It is whether the public has sufficient information to understand the cost and risks attached to a financing arrangement backed by public resources.
The analysis said the Ministry’s public scorecard did not provide facility-level disclosure on the reported drawdown, collateral, pricing, fees, triggers, counterparty obligations and use of proceeds.
“This omission does not by itself prove illegality or misconduct,” Oye said. “It does, however, make the Minister’s wording especially difficult to defend.”
He argued that commercially sensitive details could be withheld where genuinely necessary, but the material facts of a sovereign financing arrangement should be available to citizens, lawmakers, auditors and markets.
“Approval is not disclosure,” the analysis stated. “A transaction can be properly authorised and still inadequately explained.”
What Oye wants disclosed
The Alliance for Economic Research and Ethics urged the FG to publish a redacted term sheet or authoritative summary of the Abu Dhabi facility.
It said this should include the facility’s amount, tenor, tranche structure and drawdown schedule, as well as pricing benchmarks, fees, break clauses and the terms governing collateral.
Oye also called for disclosure of margin-call and early-termination triggers, the purpose of each drawdown, the treatment of drawn but unspent funds and periodic utilisation reports.
The former NACCIMA president further argued that the government’s comparison of the Abu Dhabi facility with World Bank loans, Eurobonds and Sukuk did not settle the disclosure question.
A Total Return Swap, he said, combines financing with derivative and collateral features, requiring disclosure that adequately captures those additional risks.
He also questioned the argument that National Assembly approval should be regarded as sufficient public disclosure.
According to the analysis, legislative approval establishes authority for a transaction but does not necessarily reveal how much has been drawn, what collateral has been pledged, what events could trigger accelerated payment, the effective cost of the facility or how its proceeds have been used.
Reform gains against household pressure
Oye nevertheless acknowledged that the government’s reform scorecard provides useful information and represents an improvement in fiscal communication.
The analysis credited the Ministry for distinguishing between resources shared across the Federation and those available to the Federal Government, while acknowledging the household pressure created by the reforms.
It also recognised improvements in inflation, external reserves, exchange-rate functioning, revenue mobilisation and fiscal discipline.
But Oye maintained that macroeconomic gains would have greater credibility if Nigerians could follow the movement of public resources from collection and borrowing through spending and debt management.
His analysis therefore called for the reform scorecard to distinguish clearly between revenue, borrowing, projections and independently verified figures.
It also proposed regular reporting on complex financing arrangements, including collateralised borrowing and derivative-based transactions, with information on gross exposure, drawn amounts, collateral status, valuation movements, refinancing risks and worst-case scenarios.
For Oye, the central issue is ultimately whether the gains from economic reforms can be sustained without weakening public accountability.
He acknowledged that the Abu Dhabi facility could provide liquidity and refinancing benefits, but warned that its collateral and margin-call features could create risks that require proper disclosure.
“A swap may be innovative. Public accountability need not,” the analysis stated.
He urged the Federal Government to make the facility part of its broader public-finance reporting, arguing that greater disclosure would strengthen rather than undermine confidence in the reforms.
Naira value
On the Naira value, he said the increase in physical cash in circulation should not be interpreted as evidence of stronger economic activity, arguing that inflation had significantly eroded the purchasing power of Nigerians’ cash holdings.
The CBN’s 2025 Annual Report stated that currency-in-circulation (CIC) stood at N5.73 trillion in 2025, compared with N5.44 trillion in 2024, attributing the rise to increased economic activity and higher demand for cash.
Oye’s analysis of CBN, National Bureau of Statistics (NBS), and World Bank data showed that the headline increase in cash circulation masked a deeper decline in the real value of money in Nigerians’ hands.
According to the report, currency-in-circulation increased from N3.325 trillion in 2021 to N5.733 trillion in 2025, representing a nominal growth of 72.4 per cent over the period.
But after adjusting for inflation, the report said the picture changed significantly, with the purchasing power of cash held by Nigerians falling by approximately 29 per cent between 2021 and 2025.
The report challenged the CBN’s explanation that the increase reflected stronger economic activity.
It noted that while Nigeria’s real Gross Domestic Product (GDP) grew by 3.87 per cent in 2025 from 3.38 per cent in 2024, annual average inflation stood at 23.01 per cent during the same period.
Using inflation adjustment, the report calculated that real currency-in-circulation declined by approximately 14.3 per cent in 2025, despite the nominal increase in cash supply.
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