The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has called on Nigeria to reduce its dependence on borrowing and focus on building a stronger, more reliable domestic revenue base to stabilise public finances and fund development sustainably.
Speaking on Tuesday at the Nigerian Revenue Service (NRS) management retreat in Abuja, Edun warned that the global financial environment had grown increasingly hostile to developing economies, making debt-driven financing more costly and less viable.
“And of course, we need to reduce our dependence on debt. And so, revenue mobilisation within this context is a developmental imperative,” he said.
Edun noted that the retreat from multilateral cooperation has left poorer nations facing an unfavourable balance between foreign assistance and debt service. Data from 2024 showed developing countries paid about $163 billion in debt service while receiving $42 billion in overseas development assistance and $97 billion in foreign direct investment, highlighting the negative net effect of external funding.
“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.
He attributed Nigeria’s rising debt pressures to global shocks, including the COVID-19 pandemic, geopolitical conflicts, and trade tensions, which forced many developing countries to borrow more while paying higher debt service.
“That is why it is critical at this time that we move to an era of sustainable revenues so that we can invest meaningfully in infrastructure, strengthen education and healthcare, and help the poorest and the most vulnerable,” he added.
Edun’s remarks come as the Senate has indicated that fresh loans may be inevitable to plug Nigeria’s large budget deficit. Senate Committee on Appropriations Chairman Olamilekan Adeola acknowledged the challenge, saying that while borrowing is unavoidable due to weak revenue inflows and significant development gaps, the focus should be on sustainable financing strategies.
Edun emphasised that Nigeria’s ongoing tax reforms are central to reducing reliance on debt. The reforms aim to improve fairness, efficiency, and resource availability for social and capital spending. However, he stressed that policy reforms alone cannot deliver results without strong execution and improved compliance.
“No fiscal reform can deliver results if compliance is weak or uneven,” he said, adding that trust in the tax system is crucial. Citizens must see the benefits of their contributions in infrastructure and services to ensure sustained compliance.
Edun highlighted that the Nigerian Revenue Service sits at the centre of fiscal reform, with its effectiveness determining the success of policy implementation. “The connection between macroeconomic conditions and revenue performance is direct and unavoidable,” he said, noting that economic growth, exchange rate dynamics, and inflation all influence revenue performance.
Executive Chairman of NRS, Zacch Adedeji, said the establishment of the service represents a decisive break from the past, requiring a new approach to leadership, accountability, and execution. He warned that legacy habits could undermine reform if unchallenged.
“What brought us here will not be sufficient for where we are going,” Adedeji said, urging managers to examine how their leadership and decision-making shape outcomes. He stressed that the credibility of Nigeria’s revenue system and confidence in the economy now rests on the NRS’s ability to deliver measurable results with integrity, discipline, and clarity of purpose.
