Finance Minister and Coordinating Minister of the Economy, Wale Edun, on Tuesday, stressed the urgent need for Nigeria to reduce reliance on borrowing and strengthen domestic revenue mobilisation to ensure fiscal stability and sustainable development.
Speaking at the Nigerian Revenue Service management retreat in Abuja, Edun warned that the global financial environment has become increasingly hostile to developing economies, making debt-driven financing more costly and less viable.
“We need to reduce our dependence on debt. Revenue mobilisation within this context is a developmental imperative,” he said.
Edun highlighted that in 2024, developing countries paid $163 billion in debt service, compared to just $42 billion in overseas development assistance and $97 billion in foreign direct investment, underscoring the negative balance of external funding flows.
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He linked Nigeria’s rising debt pressures to global shocks such as COVID-19, geopolitical conflicts, and trade tensions, which have forced many countries to borrow more while paying higher debt service. He argued that Nigeria must anchor fiscal sustainability on its own capacity to generate revenue and savings.
The minister emphasised that tax reforms are central to this shift, designed to improve fairness, equity, and efficiency while boosting resources for social and capital spending. However, he cautioned that reforms will only succeed with strong compliance and public trust in the system.
“People must see the benefits of their contributions in infrastructure and services,” Edun noted, adding that revenue reform is both a technical and governance challenge.
Edun also warned against Nigeria’s cyclical revenue system, which rises with oil prices but weakens when they fall, calling for a more resilient structure.
