The Minister of Finance and Coordinating Minister of the Economy Wale Edun has said Nigeria must urgently reduce its dependence on borrowing and focus on building a stronger and more reliable domestic revenue base to ilise public finances and fund development sustainably.
Edun made the remarks on Tuesday at the management retreat of the Nigerian Revenue Service NRS in Abuja. He warned that the global financial environment has become increasingly unfavourable to developing economies making debt driven financing more expensive and less viable.
According to the minister the world is gradually retreating from multilateral cooperation with countries prioritising domestic interests and reducing cross border financial support. He noted that this shift has placed developing nations at a disadvantage as debt service obligations now far outweigh external inflows.
Edun cited 2024 data showing that developing countries paid about 163 billion dollars in debt service compared to 42 billion dollars in overseas development assistance and 97 billion dollars in foreign direct investment. He said the figures highlighted the urgent need for Nigeria to rely more on internally generated revenue rather than borrowing in an era of high global interest rates.
He stressed that fiscal sustainability must be anchored on Nigeria’s own revenue generating capacity adding that savings for investment can only be achieved through stronger and more predictable revenue mobilisation. He linked Nigeria’s rising debt pressures to global shocks such as the COVID 19 pandemic geopolitical conflicts and trade tensions which have squeezed fiscal space.
The minister said sustainable domestic revenue is critical for meaningful investment in infrastructure education healthcare and social protection especially for the most vulnerable citizens. He added that Nigeria’s ongoing tax reforms are central to reducing debt dependence by improving fairness equity and efficiency in revenue administration.
However Edun cautioned that reforms would not succeed without strong execution and improved compliance. He emphasised that trust in the tax system is essential noting that citizens must see fairness in administration and tangible benefits from their contributions.
Speaking earlier the Executive Chairman of the NRS Zacch Adedeji said the new revenue service represents a decisive break from the past and carries the responsibility of delivering Nigeria’s fiscal reform objectives. He stressed that leadership accountability and execution would determine success more than structure or technology.
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