The Federal Government is designing a new framework to lower the cost of capital for businesses without reintroducing subsidies, Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has said.
Oyedele disclosed this on Thursday in Abuja at the 7th Africa Emerging Markets Forum, describing the initiative as a complement to the Central Bank of Nigeria’s ongoing efforts to tame inflation while easing financing costs for businesses.
“There is a high cost of borrowing in an economy where you need growth to deliver results from reforms,” he said. “Within the Ministry of Finance, we are working on a framework on how to bring down the cost of capital without introducing subsidies because we believe we can complement the work of the monetary authorities.”
Government to publish full account of fuel and FX subsidy savings
The minister also announced that the government will soon release a detailed report on how much was saved from the removal of fuel and foreign exchange subsidies and how those funds have been spent as a direct response to mounting public pressure for accountability over savings from subsidy removal.
He estimated the combined impact of the fuel and FX subsidies at about 5% of GDP before their removal.
Oyedele said, “In a few days, you will see the detailed analysis because we believe we owe a duty to explain what we do to the Nigerian people. That’s what transparency looks like.”
According to him, the freed-up funds have gone toward servicing higher debt costs as interest rates climbed, funding the N70,000 minimum wage, and financing social intervention programmes, describing them as obligations that emerged after the government stopped financing deficits through money printing.
He noted that government borrowing costs have risen from about 8% before the reforms to as much as 24% today, even as the minimum wage more than doubled from N30,000.
He also pointed to the Nigerian Education Loan Fund (NELFUND), which he said has supported more than 1.5 million students with tuition and monthly stipends.
On borrowing despite exceeding revenue targets
Responding to criticism that government keeps borrowing even after beating its revenue targets, Oyedele argued that exceeding a target doesn’t eliminate the deficit if spending is still higher than income.
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“If you have a budget to spend 10 and a revenue target of six, you still need to borrow four. If revenue rises to seven, you have exceeded your target, but you still need to borrow three,” he said, adding that borrowing is justified as long as it funds investments that generate returns above the cost of borrowing.
Sites stock market, GDP, and income growth as a reform scorecard
Oyedele defended the Tinubu administration’s reform agenda, such as FX unification, subsidy removal, fiscal consolidation and tax reform, describing them as a choice for long-term stability over short-term political convenience.
On tax reform specifically, he said the changes have scrapped nuisance taxes, expanded VAT input credits for manufacturers, removed withholding tax on manufacturing, exempted small businesses from several levies, and removed VAT from essential goods and services.
He cited a run of improving indicators such as rising capital inflows across both portfolio and direct investment, Nigeria’s stock market ranking as the world’s best performer so far in 2026, and real GDP growth of 3.89% in the first quarter.
In dollar terms, he said the economy grew 11.2% in 2025, with the non-oil sector expanding 3.94% in Q1, evidence, he argued, of diversification away from oil.
“A stable economy can still be a stagnant one.”
Oyedele cautioned that macroeconomic stabilisation alone isn’t the finish line.
“A stable economy can still be a stagnant one if growth is weak,” he said. “We have done the foundational work of the first phase. Our task now is converting that stability into investment, investment into productivity, productivity into decent jobs and decent jobs into incomes that Nigerian families can actually feel.”
He said Nigeria recorded nearly 10% real per capita income growth in dollar terms in 2025, placing it among the fastest countries lifting people out of poverty and said government will now track performance using multidimensional poverty, real per capita income growth, and the Gini coefficient, to gauge whether growth is genuinely inclusive.
He further disclosed that preliminary government analysis found the economic cost of excessive regulation, bureaucracy and policy inconsistency exceeds the combined revenue collected from corporate income tax, personal income tax and VAT.
Looking ahead, Oyedele reaffirmed the administration’s target of a $1 trillion economy by 2030.
“A trillion-dollar Nigerian economy by 2030 is not a slogan; it is a target,” he said. “Prosperity is never an accident. It is the deliberate product of sound policy, disciplined execution, effective coordination between fiscal and monetary authorities, and partnership between government and enterprise.”
Sunday Michael Ogwu is a Nigerian journalist and editor of Pinnacle Daily. He is known for his work in business and economic reporting. He has held editorial roles in prominent Nigerian media outlets, where he has focused on economic policy, financial markets, and developmental issues affecting Nigeria and Africa more broadly.