The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has urged Nigeria to cut its reliance on borrowing and strengthen its domestic revenue base to ensure sustainable financing for national development.
Speaking on Tuesday at the Nigerian Revenue Service (NRS) management retreat in Abuja, Edun warned that the global financial environment has grown increasingly hostile to developing economies, making debt-driven financing costlier and less viable.
“And of course, we need to reduce our dependence on debt. Revenue mobilisation within this context is a developmental imperative,” he said.
He noted that countries worldwide are prioritising domestic interests and scaling back cross-border financial support, leaving poorer nations with an unfavorable balance between debt payments and incoming financial aid. Data for 2024, Edun highlighted, showed developing countries paid $163 billion in debt service, compared with $42 billion in overseas development assistance and $97 billion in foreign direct investment, underscoring how external funding has turned largely negative.
“The primary anchor of our fiscal sustainability… is going to be our own fiscal efforts, our own ability to generate savings, which then can be used for investment. And before you can generate savings, you have to have the revenue,” Edun said.
Edun linked Nigeria’s rising debt pressures to global shocks, including the COVID-19 pandemic, geopolitical conflicts, and trade tensions, which have forced many developing countries to borrow more while paying higher debt service. He emphasised that sustainable domestic revenue is essential for investing in infrastructure, education, healthcare, and social support for the most vulnerable.
The call to rein in borrowing comes as the Senate indicated fresh loans may be inevitable to bridge Nigeria’s large budget deficit. The Chairman of the Senate Committee on Appropriations, Olamilekan Adeola, stated that unpredictable revenue inflows and pressing development gaps make borrowing unavoidable.
“Nigeria cannot help but keep borrowing because revenue inflows are unpredictable and development needs are enormous. What matters is how we borrow and how we fund our deficits,” Adeola said.
Edun described ongoing tax reforms as a central part of reducing debt reliance, aiming to improve fairness, efficiency, and the resources available for social and capital spending. However, he stressed that policy reforms must be backed by strong execution and improved compliance.
“No fiscal reform can deliver results if compliance is weak or uneven. Yet compliance cannot be achieved through enforcement alone. It is carrot and stick,” he said, adding that trust in the tax system is critical to improving compliance and reducing debt dependence.
Edun highlighted that the Nigerian Revenue Service sits at the heart of fiscal reform, translating policy into measurable outcomes, such as higher, more predictable revenues, reduced fiscal vulnerability, and stronger public service delivery.
“The connection between macroeconomic conditions and revenue performance is direct and unavoidable. Economic growth expands the tax base. Exchange rate dynamics affect customs revenue. Inflation influences compliance behaviour and affects the real value of collections,” he explained.
He further warned that Nigeria must build a revenue system resilient to economic volatility, rather than one dependent on high oil prices.
Earlier, NRS Executive Chairman Zacch Adedeji described the establishment of the service as a decisive break from the past, emphasising that leadership, accountability, and execution would determine the success of reforms.
“What brought us here will not be sufficient for where we are going,” Adedeji said, urging senior managers to reassess leadership styles and decision-making processes that could either enable or constrain performance.
He stressed that the credibility of Nigeria’s revenue system and confidence in the economy now rests on the NRS delivering results with integrity, discipline, and clarity of purpose, noting that measurable outcomes, rather than speeches or documents, will define success.
Elijah Adeyemi
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