Fuel Subsidy Removal And Borrowing Saga, Fully Explained

CAN A OIL PRODUCING COUNTRY STILL BE BORROWING AFTER FUEL SUBSIDY IS REMOVED?

> Yes — an oil-producing country can still borrow even after removing fuel subsidies. - DWI 

Removing subsidies helps, but it doesn’t magically fix the whole budget. Here’s why countries like Nigeria still borrow post-subsidy: 

1. Subsidy Removal ≠ Instant Cash Surplus 

When Nigeria removed PMS subsidy in May 2023, it cut ∼$10B/year in direct costs. But:

- Debt service was already eating >90% of govt revenue in 2022. Subsidy removal freed up cash, but most of it went to paying old debts, not new spending.

- Revenue ≠ profit. You still have salaries, pensions, infrastructure, security, education, health to fund. 

2. Oil Revenue is Volatile and Leaky...

Problem Why borrowing still happens

▪︎Oil production shortfall: Nigeria’s OPEC quota is ~1.8M bpd. Actual production often 1.2-1.4M due to theft, vandalism, underinvestment. Less oil = less dollars.

▪︎NNPC deductions: Even post-subsidy, NNPC still deducts for JV cash calls, pipeline security, “frontier exploration” before remitting to FAAC.

▪︎Oil price swings: Budget 2024 benchmarked $77/barrel. If prices dip to $65, revenue holes appear fast.

▪︎FX issues: Oil money comes in USD, but if you don’t have enough USD to meet demand, naira crashes → inflation → more borrowing to stabilize. 

3. Structural Deficits Are Bigger Than Subsidy 

Fuel subsidy was ∼2-3% of GDP. Nigeria’s fiscal deficit is ∼4-6% of GDP. Other big drains:

1. Debt servicing: ∼$15B/year in 2024. You borrow new money to roll over old debt.

2. Low tax-to-GDP: Nigeria collects ∼6-8% of GDP in tax. OECD average is 34%. So non-oil revenue is tiny.

3. Infrastructure gap: $3T needed by 2040 per AfDB. You can’t build roads/rails/power from oil cash alone.

4. Exchange rate unification: Floating the naira in 2023 tripled debt service costs in naira terms overnight. 

4. Real-world examples

-Saudi Arabia: World’s #2 oil producer, no fuel subsidy, still issued $12B in bonds in 2024. Why? Vision 2030 projects + diversification.

- Norway: Oil-rich, no subsidy, no debt. But they saved $1.6T in a sovereign wealth fund since 1990 instead of spending it.

- Angola: Oil producer, removed subsidies 2023, still borrowing from IMF/China because production fell and debt/GDP hit 90%. 

So What Would Stop Borrowing?

A country only stops borrowing when: `Revenue + savings > Spending + debt service` 

Subsidy removal helps the “revenue” side. But you also need:

1. Production at full quota with minimal theft

2. High tax collection* from non-oil sectors

3. Controlled spending and corruption

4. Sovereign savings during oil booms 

For Nigeria Specifically: Tinubu removed subsidy and “saved” ~N4T in 6 months, but debt service was N8.25T in 2024 budget. So borrowing continued to plug the gap. 

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Numbers on Nigeria’s 2024/2025 budget to show exactly where the money goes

Here’s The Actual Math For Nigeria’s 2024/2025 Budgets — Where The Money Comes From And Where It Goes:

2025 Budget: “Budget of Restoration” — N54.99 trillion total 

1. Where the money was expected to come from

- Total revenue target: N34.82 trillion

- Oil assumption: $75/barrel, 2.06M bpd, N1,500/$

- Actual revenue Jan–Oct 2025: N20.7 trillion = 61% of target 

2. Where it was budgeted to go

Item Amount% of Total Budget

Debt servicing N14.32 trillion26.0%

Recurrent (non-debt) N13.06 trillion23.8%

Capital expenditure N23.96 trillion43.6%

Statutory transfers N3.65 trillion6.6% Total N54.99 trillion 100%

3. Key Sector Allocations 

- Defence & Security: N4.91 trillion

- Infrastructure: N4.06 trillion

- Education: N3.52 trillion

- Health: N2.48 trillion 

4. What Actually Happened Jan–Oct 2025

Actual Spend Amount Notes

Debt service N13.69 trillion 66% of N20.7T revenue earned Personnel + pensions**N7.09 trillionCombined with debt = N20.78T vs N20.7T revenue

Capital projects N8.10 trillionOnly 34% of budgeted capital spent by Sept

Total expenditure N31.89 trillion 

Bottom line 2025: Debt service + salaries = N20.78T, which was _more than_ the N20.7T revenue earned. So every naira earned went to debt + wages, and capital projects were funded by borrowing. 

2024 Budget Performance — N27.5T planned, N28.7T actual spend 

1. Revenue: N19.35 trillion total

- Oil: N6.18T

- Non-oil: N4.56T

- Others: N8.32T 

2. Key Spending

ItemAmount% of Revenue Debt service**N11.89 trillion 69% of revenue Non-debt recurrent**N8.53 trillion44% of revenue Capital released**N5.81 trillion30% of revenue Total spend**N28.73 trillion148% of revenue.

3. Personnel Costs Specifically: N8.52T for salaries + pensions in 2025 budget, up 59% from N5.35T in 2024. Debt service N16.33T + personnel N8.52T = N24.85T, which is 54% of the entire N46.02T budget before any roads, schools, or hospitals.

Why Borrowing Continues Despite Subsidy Removal 

1. Debt is the biggest line item: 26-32% of budget goes to debt service alone. In 2024, 69% of all revenue went to debt.

2. Salaries + debt > revenue: Jan–Jul 2025, FG earned N13.67T but spent N14.32T on debt + wages. That’s 105% of revenue before 1 naira of capital.

3. Revenue underperformance: Oil production 1.2–1.4M bpd vs 2.06M bpd target. Oil revenue Q1–Q3 2024 was N4.63T vs N6.13T target.

4. Capital gets squeezed: Only N3.6T spent on capital Jan–Jul 2025 vs N13.67T planned — 73.7% shortfall. Debt + salaries are “first charge” expenses. 

Rule of thumb: If debt service + recurrent > revenue, you must borrow to do anything else. Subsidy removal helped — it added ~N4T in 6 months — but debt service was N8.25T in 2024 budget. 

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Breaking down the N23.96T capital budget to see what projects got funded vs what was just on paper 

Breakdown of Nigeria’s N23.96T 2025 Capital Budget — Funded vs “On Paper”

Short version: Only ∼30% was actually released/funded in 2025. The other 70% got rolled over to 2026.* So most of it stayed “on paper” this year. 

1. What Was Budgeted vs What Was Actually Released 

Category Budgeted for 2025 Actually Released/Spent by Q3 2025 Status

Total Capital Budget N23.96 trillion~N8.10 trillion spent Jan–Sept 2025 Only 34% executed % of budget released 100% 17% by Q3, 30% total for 2025.

Rolled over to 2026 70% = N16.77T**“On paper” for 2025, real work pushed to 2026 

The Ministry of Finance confirmed: “Out of the total N23.96 trillion capital allocation, 30 per cent is now being released, while the remaining 70 per cent has been rolled over into the 2026 budget”.

2. Sector Allocations — Planned vs Funded 

The re-enacted 2025 budget ringfenced N16.76T for capital, with these priorities: 7df9

SectorAllocation in BudgetWhat actually got cash-backed/funded

Works & Housing N5.8T for roads/bridgesPartial. FG cleared N2T in contractor arrears from 2024. New releases: N300bn for “critical roads”. Lagos-Calabar Coastal Highway, Sokoto-Badagry Road named as priorities.

Defense & Security N3.5T for hardware, barracksN250bn for military barracks, N120bn military aviation approved. Most big-ticket procurement still unfunded.

Energy & Power N2.1T for grid, rural electrificationNo specific release figures public. Still “on paper” mostly.

Agriculture/Food Security N1.8T for irrigation, agro-hubsN380bn for River Basin irrigation.

Light Rail N400bn for urban railUnclear if released.

Solid Minerals N1T approvedUnclear if released.

Bank of Agriculture N1.6T recapitalizationUnclear if released. 

Bottom Line: Of N23.96T planned, only N7.19T was scheduled for release to MDAs starting Feb 2026. By Oct 2025, actual capital spend was N8.10T, vs N13.69T spent on debt service in same period. 

3. Why Most Stayed “On Paper”

1. Revenue shortfall: FG earned N20.7T by Oct 2025, but spent N13.69T on debt + N7.09T on salaries = N20.78T. That’s 100.4% of revenue gone before capital.

2. Carryover policy: Govt extended 2024 capital budget to Dec 2025, so N2.23T released for 2024 projects in 2025. Focus was finishing old projects, not starting 2025 ones.

3. 30% implementation target: Tinubu’s letter said revised figures aimed to ensure MDAs hit 30% capital execution. Anything above 30% = rolled to 2026.

4. LCCI warning: “Sum of debt service and recurrent expenditure is greater than revenue projections, implying that capital spending is left without revenue for implementation”. 

4. What Was Actually Funded in 2024-2025 — Examples 

From releases tracked:

- Works: N300bn for roads, N400bn light rail

- Agriculture: N128.24bn cash-backed, N109.89bn utilized

- Health: N55.77bn cash-backed, N34.82bn spent

- Education*: N54.03bn cash-backed, N31.35bn spent

- Transport: N56.55bn allocation, N43.39bn spent

- Contractor debts: N2T paid to clear 2024 arrears

Govt’s Own Admission: Only 17% of 2025 capital released by Q3. Total 2024 capital performance was 84% = N11.59T. For 2025, provisional was 76% = N11.7T by Nov, but that includes rolled-over 2024 work. 

5. The 2026 Rule: “No New Projects ”

Budget circular for 2026 says MDAs must _“upload 70 per cent of their 2025 FGN Budget to continue in FY2026”_ and _“ban on introducing new capital projects”_. Capital ceilings for 2026 = 70% of 2025 allocations. 1ae8 

Translation: The N16.77T of 2025 capital that wasn’t funded becomes the 2026 capital budget. Only 30% of 2025 was real; 70% was a placeholder. 

> Naturally it is not new that humans do mostly follow influential people blindly because we assume they know better. But the system is there for all to investigate on our own. No perfect nation. Let’s beware of those who are trying to display perfectionism where vulnerability is required. 

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Work and pray as we continue to support our country. We have so much to do and to achieve. 

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ALLAH IS A ZIONIST

WHEN WILL THE JIHADISTS UNDERSTAND? 

In the Holy Quran, Israel (or Bani Israel) is mentioned multiple times, referencing the Israelites and their history.

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The Quran mentions "Bani Israel" (Children of Israel) around 40 times, referencing their history, struggles, and relationship with Allah. Key themes include their covenant with Allah, prophethood, and lessons for believers. 

This same Qur’an itself that they supposedly know so well acknowledges that the land was assigned to the Children of Israel.

The Holy Quran Does Mention The Children of Israel (Bani Israel) And Their Connection To The Land.

● Surah Al-Ma'idah (5:21) - (spoken by Prophet Musa (Moses) to Bani Israel).

“O my people, enter the Holy Land which Allah has assigned to you." 

● Surah Al-A'raf (7:137)

“And We caused the people who had been oppressed to inherit the eastern parts of the land and the western parts which We had blessed.”

Please, take not of the phrase: "Eastern Parts" and "Western Parts", it has spiritual implications. Also, Interpreted as Bani Israel inheriting a blessed land (often linked to the Levant) 

● Surah Al-Isra (17:104)

“And We said to the Children of Israel after him, ‘Dwell in the land.’” 

● Surah Al-Isra (17:4–8)

“You will surely cause فساد (corruption) in the land twice. Then we gave you back a turn. Then if you do good, you do good for yourselves; and if you do evil, it is for yourselves.” 

Islamists use this Surah as an argument to say that the covenant was conditional and that Jews lost the right to the land, but this is false. It just says that Bani Israel would rise and fall based on obedience and corruption and acknowledges their repeated return to the land, not a loss of right to it. 

● Surah Al-Ma'idah (5:13) 

“So for their breaking of the covenant, We cursed them and made their hearts hard. They distort words from their proper places and have forgotten a portion of that of which they were reminded. And you will still observe deceit among them, except for a few of them. But pardon them and overlook [their misdeeds]. Indeed, Allah loves the doers of good.” 

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Also this Surah speaks about covenant violations, but nowhere does it say that the land is no longer belonging to Jews? No. On the contrary. Punishment ≠ cancellation of the original assignment. The text criticizes behavior, not the existence of the connection to the land. When YAHWEH (Allah) swore the land to Abraham and his descendants, i never said he will it to others of they sinned. HE only promised severe punishment, forgiveness and restoration over repentance. 

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How Many Times The Following Words Appear In The Qur'an: 

Israel - 2 times

Children of Israel (Bani Israel) - 43 times

Palestine - 0 times 

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TESLA'S FULL SELF-DRIVING SYSTEM UNDER FIRE

AUTONOMOUS VEHICLES: THE DANGEROUS SIDES UNFOLD

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A Texas woman is suing Tesla for $1 million after her Cybertruck crashed on a Houston highway ramp while using the Full Self-Driving (FSD) system. The vehicle allegedly accelerated unexpectedly and failed to respond properly, causing serious injuries to the driver. The lawsuit claims Tesla's FSD system is defective and misrepresented, highlighting concerns about the safety and reliability of self-driving technology.

The incident has sparked debate about Tesla's FSD system, which is classified as an advanced driver-assistance system requiring constant driver attention. The National Highway Traffic Safety Administration (NHTSA) is investigating Tesla's FSD system, covering around 3.2 million vehicles, after nine crashes linked to the technology, including one fatality.

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THE LAWSUIT AND THE INVESTIGATION INTO TESLA'S FSD SYSTEM 

The lawsuit against Tesla involves a Texas woman, Justine Saint Amour, who claims her Cybertruck malfunctioned while using the Full Self-Driving (FSD) system, causing a serious crash on a Houston highway ramp in August 2025. She's seeking $1 million in damages, alleging Tesla's FSD system is defective and misrepresented

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The investigation into Tesla's FSD system is ongoing, with the National Highway Traffic Safety Administration (NHTSA) upgrading its probe to an Engineering Analysis, covering 3.2 million vehicles. The NHTSA is examining the system's ability to detect degradation and alert drivers in reduced visibility conditions, citing nine crashes linked to the technology, including one fatality.

Key issues with Tesla's FSD system include:

- Visibility Detection: Failing to detect common road conditions like sun glare, fog, or airborne dust

- Alert System: Not providing timely alerts when camera performance deteriorates

- Design Flaws: Relying solely on cameras, without LiDAR or radar sensors

- Marketing: Potentially misleading branding of FSD as "Full Self-Driving" despite requiring constant driver supervision 

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THE IMPLICATIONS OF THIS LAWSUIT OR THE NHTSA's INVESTIGATION INTO TESLA'S FSD SYSTEM

The lawsuit and NHTSA's investigation into Tesla's Full Self-Driving (FSD) system have significant implications for the company's autonomous driving technology. The NHTSA has upgraded its probe into 3.2 million Tesla vehicles, citing concerns that the FSD system may fail to detect or warn drivers in poor visibility conditions, potentially leading to crashes.

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The investigation follows reports of 58 incidents, including 14 crashes and 23 injuries, where FSD allegedly caused vehicles to run red lights, make illegal maneuvers, or crash. The NHTSA is examining whether Tesla's FSD system poses an unreasonable safety risk and may issue a recall if necessary. 

This isn't the first time Tesla's FSD system has faced scrutiny. The company has faced criticism for its marketing and safety claims, with some arguing that the system's name is misleading. The investigation adds to the regulatory pressure on Tesla as it pushes forward with its autonomous driving ambitions. 

THE POTENTIAL OUTCOMES OF THIS INVESTIGATION AND TESLA'S PLANS FOR ITS FSD SYSTEM

The National Highway Traffic Safety Administration (NHTSA) has upgraded its investigation into Tesla's Full Self-Driving (FSD) system, covering approximately 3.2 million vehicles. The probe focuses on the system's ability to detect and respond to degraded visibility conditions, such as fog, sun glare, and heavy rain, after nine crashes linked to the technology, including one fatality.

Potential outcomes of the investigation include:

- Recall: A possible recall of Tesla's FSD software to address visibility concerns.

- Software Update: Tesla may need to update its FSD system to improve visibility detection and alert drivers more effectively.

- Regulatory Action: The NHTSA may impose fines or other penalties on Tesla if the investigation finds significant safety defects.

Tesla's plans for its FSD system include:

- Expansion: Tesla aims to deploy FSD technology more broadly, including unsupervised driving in select markets.

- Improved Safety: The company is working to enhance its degradation detection system to better recognize and respond to impaired visibility. 

The investigation's outcome could significantly impact Tesla's autonomous driving ambitions and the broader automotive industry.

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CONCLUSION: WEIGHING THE PROS AND CONS OF TESLA'S FULL SELF-DRIVING TECHNOLOGY

As humans continue to push the boundaries of technological innovation, Tesla's Full Self-Driving (FSD) system represents a significant milestone in the pursuit of autonomous transportation. However, recent incidents and investigations highlight the complexities and challenges of integrating AI-powered systems into everyday life.

Advantages:

- Enhanced Safety: FSD has the potential to reduce accidents caused by human error, with features like automatic emergency braking and lane-keeping assist.

- Increased Mobility: Autonomous vehicles could provide independence for the elderly, disabled, and those unable to drive themselves.

- Efficiency: FSD could optimize traffic flow, reducing congestion and lowering emissions.

Disadvantages:

- Safety Concerns: Incidents like the Texas crash raise questions about FSD's reliability and ability to handle complex scenarios.

- Technical Limitations: FSD's reliance on cameras and sensors can be compromised by poor visibility, weather conditions, or system failures.

- Regulatory Challenges*: volving regulations and public acceptance will be crucial to FSD's widespread adoption.

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As technology advances, striking a balance between innovation and safety will be crucial. The outcome of the NHTSA's investigation and Tesla's response will likely shape the future of autonomous driving.

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