Nigeria must reduce its reliance on borrowing and strengthen its domestic revenue base to stabilise public finances and fund sustainable development, Finance Minister and Coordinating Minister of the Economy, Wale Edun, said on Tuesday.
Speaking at the Nigerian Revenue Service (NRS) management retreat in Abuja, Edun warned that the global financial environment had grown increasingly hostile to developing economies. He said debt-driven financing had become costlier and less reliable, making domestic revenue mobilisation a developmental necessity.
Global Shocks Make Borrowing Risky
Edun noted that the world was retreating from multilateral cooperation. Countries were prioritising domestic interests and scaling back cross-border financial support. This, he said, left developing nations with an unfavourable balance between what they received from abroad and what they paid in debt service.
“Data for 2024 show that developing countries paid about $163 billion in debt service, while receiving only $42 billion in overseas development assistance and $97 billion in foreign direct investment,” Edun said.
He added that rising debt pressures stemmed from global shocks such as the COVID-19 pandemic, geopolitical conflicts, and trade tensions. These events forced many countries, including Nigeria, to borrow more while paying higher debt service, squeezing fiscal space and making it harder to fund essential services.
Domestic Revenue: The Primary Anchor
Edun said Nigeria’s fiscal sustainability must now rely on its own revenue-generating capacity. “The primary anchor of our fiscal sustainability is our own ability to generate savings, which can then be invested. And before you can save, you must have revenue,” he said.
He stressed that revenue reforms must focus on fairness, efficiency, and equity, while improving resources available for social and capital spending. However, policy changes alone were not enough. Strong execution and improved compliance, he said, were equally critical.
“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.
Building Trust in the Tax System
Edun linked compliance to public trust. Citizens need to see that their contributions lead to tangible benefits in infrastructure, education, healthcare, and social services. “People must see the benefits of their contributions,” he said, noting that revenue reform is both a technical and governance challenge.
He highlighted the role of the Nigerian Revenue Service in translating policy into measurable outcomes. Success, he said, should be judged by higher, more predictable revenues, reduced fiscal vulnerability, and improved public service delivery.
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Speaking earlier, NRS Executive Chairman Zacch Adedeji said the creation of the NRS marked a decisive break from the past. He warned that legacy behaviours and assumptions could undermine reform if left unchallenged.
“What brought us here will not be sufficient for where we are going,” Adedeji said.
He urged senior managers to examine how leadership styles, decision-making, and internal culture could either unlock or limit performance.
Adedeji added that the credibility of Nigeria’s revenue system and confidence in the economy now rested on the NRS’s ability to deliver results with integrity, discipline, and clarity of purpose. “The service will not be judged by speeches or reform documents, but by measurable outcomes that strengthen public trust and support national development,” he said.
The Stakes for Nigeria’s Fiscal Future
Edun concluded that Nigeria must build a revenue system resilient to volatility. He said reliance on oil and external borrowing makes the system cyclical and vulnerable. “Economic growth expands the tax base. Exchange rate dynamics affect customs revenue. Inflation influences compliance and the real value of collections. A resilient revenue system is key,” he said.
The finance minister’s remarks underline a critical shift in Nigeria’s fiscal strategy: reducing debt dependence while reinforcing a predictable, fair, and effective domestic revenue system to fund development sustainably.
Esther Ososanya is an investigative journalist with Pinnacle Daily, reporting across health, business, environment, metro, Fct and crime. Known for her bold, empathetic storytelling, she uncovers hidden truths, challenges broken systems, and gives voice to overlooked Nigerians. Her work drives national conversations and demands accountability one powerful story at a time.
