Tinubu Hails Economic Reforms as Debt Service Drops, State Revenues Surge to N6 Trillion
In a speech marking his second year in office, President Bola Tinubu highlighted significant economic gains achieved through his administration’s reforms. One of the standout achievements, according to the president, is the sharp reduction in Nigeria’s debt service-to-revenue ratio, which dropped from nearly 100% in 2022 to under 40% by 2024. He attributed this improvement to fiscal discipline, policy reforms, and enhanced revenue strategies.
President Tinubu also revealed a dramatic increase in states’ revenue, which rose by over N6 trillion in 2024. He stated that these gains have enabled subnational governments to better manage their debt burdens, meet salary and pension obligations, and invest more in essential infrastructure and human capital. Tinubu credited the removal of fuel subsidies and the liberalization of the foreign exchange market as key factors behind the increased revenue allocations to states.
The removal of fuel subsidies alone, he said, saved Nigeria about $20 billion in 2024. This policy shift, along with the elimination of foreign exchange controls, helped stabilize the economy and boost foreign reserves from $4 billion in 2023 to over $23 billion by the end of 2024. Tinubu noted that these moves were tough but necessary for long-term economic sustainability.
Another highlight of the president’s address was the progress made in tax reforms. Tinubu announced that the country’s tax-to-GDP ratio had grown from 10% to over 13.5% within a year—an outcome of improved tax administration and policies aimed at fairness and economic growth. He emphasized that the reforms are making it easier for small businesses to thrive and encouraging more economic activity in the formal sector.
To protect vulnerable populations, Tinubu confirmed that essential goods and services such as food, education, and healthcare would now attract 0% VAT, with public transport, rent, and renewable energy also exempt. These measures, he said, are intended to increase disposable income and reduce the cost of living for Nigerians while driving inclusive economic development.
Source: Business day