By Mohammed Bello Doka
29 May, 2026.
On May 29, 2023, President Bola Ahmed Tinubu stood before a crowd in Abuja and declared, “Subsidy is gone.” The announcement, made during his inauguration speech, sent shockwaves through Nigeria’s political and economic establishment. For decades, the fuel subsidy had been an untouchable third rail of Nigerian politics, a populist measure that successive administrations had feared to remove despite its crippling fiscal cost. Tinubu’s gambit was bold, decisive, and immediately painful. Petrol prices tripled overnight. Inflation soared. The naira plunged. The World Bank and International Monetary Fund applauded. Investors cheered. And ordinary Nigerians braced for impact.
Nearly three years later, the official narrative remains one of fiscal salvation. Governor Hope Uzodimma, Chairman of the Progressive Governors’ Forum, declared in May 2026 that subsidy removal was “one of the most consequential anti-corruption measures ever undertaken in Nigeria,” arguing that the previous regime had functioned as “the single largest organised corruption pipeline in our public finances”. According to Uzodimma, foreign reserves have risen to $49.4 billion, and monthly Federation Account Allocation Committee disbursements now range between N1.8 trillion and N2.6 trillion. On the surface, the numbers appear to vindicate Tinubu’s gamble.
But beneath the surface lies a far more troubling reality. The subsidy has been removed in name only. A growing body of evidence from international financial institutions, opposition figures, and even government insiders reveals that the Tinubu administration has simply re-routed the same public funds into opaque new channels. The ghost of the subsidy continues to haunt Nigeria’s fiscal space, and the promised dividends remain largely invisible to the 140 million Nigerians now living in poverty.
The most damning evidence comes from the World Bank itself. In its Nigeria Development Update released in April 2026, the Bank revealed that the Nigerian National Petroleum Company Limited has been remitting only about 50 percent of the financial gains from subsidy removal to the Federation Account. Despite the subsidy being fully removed in October 2024, the NNPC started transferring revenue gains to the Federation only in January 2025. Since then, the World Bank stated, “it has been remitting only 50 percent of these gains, using the rest to offset past arrears” . The World Bank emphasized that resolving any remaining net arrears and channelling the full benefits of subsidy reform to the Federation is “critical for sound fiscal management” .
This is not a minor accounting discrepancy. The IMF has estimated that the full subsidy savings amount to approximately N700 billion per month, or around two percent of GDP annually . In its 2025 Article IV consultation report, the IMF urged the federal government to recover these funds, warning that without a redirection of subsidy savings into the public treasury, the government would be forced to make difficult adjustments elsewhere, particularly cuts to capital spending. The Fund specifically noted that “securing these funds—estimated at N700 billion per month—is essential for maintaining a neutral fiscal stance and financing critical development spending” . The IMF further warned that “if the savings are not realised starting H2-2025, and given that tax policy reforms under consideration are not expected to deliver significant revenue gains in 2025, adjustment would have to come from the expenditure side (0.6 percent of GDP)”, recommending that the government “prioritise adjustments to recurrent spending to protect growth-enhancing investments” . Capital spending, the Fund noted, will face pressure and will need to be “rationalised to preserve critical projects with the highest contribution to growth and job creation” . The IMF also explicitly warned that the savings have yet to fully materialise in the federal budget “due to opacity in oil revenue remittances by NNPC” .
The NNPC’s explanation for withholding half of the savings is that it needs to settle “past arrears” and “PMS-related subsidies that should be settled first” . This language is deliberately opaque. What exactly are these arrears? Who authorised them? And why should the Nigerian people bear the cost of the NNPC’s past financial mismanagement? The state-owned oil company, which is supposed to be a profit-driven entity under the Petroleum Industry Act, is effectively acting as a parallel treasury, diverting billions of naira in public funds before they ever reach the Federation Account.
Former Vice President Atiku Abubakar has raised even more alarming allegations. In a statement issued in November 2025, Atiku argued that the present administration is still using public funds to pay for fuel subsidies, contrary to its repeated denials . He pointed to expenditures captured under “energy-security cost to keep petrol prices stable” and what the government calls “under-recovery” as evidence that the subsidy has simply been renamed. According to Atiku, N7.13 trillion has been spent on “energy-security cost” and another N8.67 trillion on “under-recovery” . These two new coinages, he argued, are “a balablu nomenclature of the Tinubu administration to deceive Nigerians about its fraudulent claim that it is no longer paying subsidies on petroleum products” .
The scale of these opaque expenditures is staggering. Atiku further alleged that N17.5 trillion had been spent in just 12 months on “securing fuel pipelines and others,” with the identities of the contractors shrouded in secrecy . For context, Nigeria spent roughly N18 trillion on fuel subsidy over a period of twelve years under the previous regime . Under President Tinubu, the country has now expended nearly the same amount in a single year on what appears to be the same subsidy, repackaged and redirected to private firms. Atiku described this as “not governance” but “grand larceny dressed as public expenditure”, stating that the administration “did not end subsidy — it merely redirected public wealth from the entire nation to a privileged cartel anchored around the Presidency” . He further questioned why Nigerians continue to face fuel prices as high as N1,000 per litre despite these expenditures, and declared that “no administration that presides over this level of fiscal recklessness has the moral authority to demand sacrifice from its people” .
The contrast between government rhetoric and fiscal reality could not be starker. While Tinubu’s aides celebrate the removal of subsidy as a fiscal liberation, the NNPC continues to bleed public funds through channels that are barely accountable to the National Assembly, let alone the Nigerian people.
Meanwhile, the promised dividends of subsidy removal have largely failed to materialise for ordinary Nigerians. State governments across the federation now receive nearly triple the monthly allocations they used to get from the Federation Account. Kano’s share ballooned from N99.31 billion in 2022 to N279.69 billion in 2025. Lagos rose from N161.29 billion to N531.51 billion. Taraba from N51.74 billion to N157.56 billion. Zamfara from N56.62 billion to N167.20 billion. These are enormous increases. Yet citizens across these states report that the windfall has not translated into tangible relief.
The World Bank’s April 2026 report indicated that poverty in Nigeria rose to about 140 million people in 2025, representing 63 percent of the population . The poverty rate increased from 56 percent in 2023 to 61 percent in 2024 before peaking at 63 percent in 2025 . Fiseha Haile, the World Bank’s Lead Economist for Nigeria, warned that poverty remains elevated despite recent macroeconomic improvements, and that inflation continues to undermine real incomes and slow welfare gains . The 2022 Multidimensional Poverty Index survey by the National Bureau of Statistics had already stated that 133 million Nigerians were multidimensionally poor, lacking adequate access to healthcare, food, and housing. By every measure, hardship has deepened, not eased. The World Bank explained that although inflation declined significantly—headline inflation fell from 34.80 percent in December 2024 to 15.15 percent in December 2025, and food inflation dropped from 39.84 percent to 10.84 percent over the same period—poverty continued to rise because household incomes have not grown fast enough to offset still-elevated inflation, and poverty has yet to begin declining . The World Bank noted that “incomes coming into households have not increased sufficiently to cover the impact of still-high inflation, and poverty has yet to start falling” .
Professor Adeola Adenikinju, President of the Nigerian Economic Society, captured the public frustration precisely. “When you remove subsidy, you are supposed to take care of the poor and vulnerable, but are we doing that now?” he asked. “Poverty has increased, and unemployment is also on the high side. In what way have we been able to mitigate the effects of subsidy removal? I think that is the question we should be asking”. He noted that state governments are not spending enough, and that even at the federal level, “there is so much baggage, avoidable spending and unnecessary expenditure on travel”.
Even Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, who was appointed Minister of Finance and Coordinating Minister of the Economy, has conceded that subsidy savings alone cannot deliver the level of infrastructure and services required for national transformation. Speaking in September 2025, Oyedele stated, “Even if you remove corruption and waste completely, the resources at our disposal are not enough to transform Nigeria. Subsidy savings alone cannot deliver the level of infrastructure and services required. Our fiscal space is simply too small”. He disclosed that Nigeria’s total annual budgetary outlay, covering the federal government, 36 states, the Federal Capital Territory, and all 774 local government areas, is less than $50 billion, a figure he described as grossly inadequate for a country of over 200 million people.
The government’s response to these revelations has been dismissive. Information Minister Mohammed Idris has denied allegations of continued subsidy payments. Governor Uzodimma has celebrated rising foreign reserves and FAAC allocations as proof of reform success. The Minister of Finance, Taiwo Oyedele, has also pushed back, insisting that media accounts had “misrepresented the findings of the latest Nigeria Development Update” and that critics had wrongly portrayed FAAC deductions as waste or missing funds . He explained that FAAC deductions include statutory transfers, savings and investments, security-related expenditures, cost-of-collection charges, refunds to MDAs, and transfers benefiting sub-national governments, arguing that “refunds and transfers to states and other tiers of the government are not leakages. They represent legitimate fiscal flows” . However, neither he nor any other official has offered a credible explanation for why the NNPC is remitting only half of subsidy savings to the Federation Account, why N17.5 trillion has been spent on pipeline security in a single year, or why 140 million Nigerians remain in poverty despite tripled state allocations.
The World Bank has projected a gradual decline in poverty beginning from 2026, estimating that poverty could fall modestly to about 59 percent by 2028, driven by lower food prices and moderate economic expansion . However, it warned that progress would likely be slow due to structural challenges such as weak job creation, low agricultural productivity, and persistent inequality, emphasising that economic growth alone would not be sufficient to significantly reduce poverty unless it is inclusive and job-rich . The World Bank also noted that global shocks, especially the Middle East conflict, contributed to rising living costs through higher energy, food, and transport prices, adding pressure to inflation and poverty and worsening the situation for low-income households that spend a large share of their income on basic needs .
The question that must be asked as Nigeria approaches 2027 is whether the Tinubu administration has the political will to follow the IMF’s advice to recover the full subsidy savings from the NNPC. The subsidy has been removed in rhetoric but not in fiscal reality. The NNPC continues to operate as a state within a state, withholding billions in public funds with minimal accountability. The promised palliatives have not reached the poor. And the poverty rate has climbed to 63 percent, erasing whatever gains were achieved in previous decades.
President Tinubu deserves credit for doing what his predecessors would not: ending the formal subsidy regime and beginning the process of fiscal rationalisation. But credit for intention is not the same as credit for results. The evidence is overwhelming that the savings from subsidy removal have been diverted, that the NNPC remains unaccountable, and that ordinary Nigerians are worse off today than they were before the reform began.
The ghost of the subsidy has not been exorcised. It has merely changed its name. And until the Tinubu administration brings the NNPC to heel, recovers the full subsidy savings, and channels those funds into visible poverty reduction and infrastructure development, the boldest reform of his presidency will remain a promise broken. As the 2027 election approaches, Nigerians will have to judge whether they are better off now than three years ago. On the evidence of poverty, hunger, and opaque public finance, the answer is a resounding no. And a president who cannot deliver the dividends of his own signature reform has no claim to a second term.
Mohammed Bello Doka can be reached via [email protected]
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