Nigeria Must Reduce Debt Reliance, Says Wale Edun, Urges Stronger Domestic Revenue Drive

Nigeria must reduce its dependence on borrowing and build a stronger domestic revenue base to secure long-term fiscal stability, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has said. Speaking at the management retreat of the Nigerian Revenue Service (NRS) in Abuja, Edun stressed that revenue mobilisation is now a “developmental imperative” as global financial conditions become tougher for developing nations. He warned that debt-driven financing is increasingly costly and less sustainable in today’s high-interest-rate environment.

Edun noted that the global financial landscape has shifted significantly, with many advanced economies prioritising domestic interests and scaling back multilateral support. According to him, developing countries paid about $163 billion in debt service in 2024, compared to $42 billion in overseas development assistance and $97 billion in foreign direct investment. The imbalance, he said, underscores why Nigeria must anchor fiscal sustainability on its own revenue-generating capacity rather than external borrowing.

Linking Nigeria’s rising debt pressures to global shocks such as the COVID-19 pandemic, geopolitical conflicts, and trade tensions, the minister explained that these crises have squeezed fiscal space worldwide. He emphasised that sustainable revenue is critical to investing meaningfully in infrastructure, strengthening healthcare and education systems, and supporting vulnerable citizens. “Before you can generate savings, you have to have the revenue,” Edun said, reinforcing the need for disciplined fiscal reforms and improved tax compliance.

However, Edun’s position comes amid concerns from the Senate that fresh borrowing may remain inevitable due to persistent budget deficits. Chairman of the Senate Committee on Appropriations, Olamilekan Adeola, recently stated that Nigeria cannot avoid loans due to unpredictable revenue inflows and significant development gaps. While acknowledging the fiscal constraints, Edun maintained that tax reforms—designed to improve fairness, equity, and efficiency—are central to gradually reducing Nigeria’s reliance on debt.

Meanwhile, Executive Chairman of the Nigerian Revenue Service, Zacch Adedeji, described the creation of the NRS as a turning point in Nigeria’s fiscal reform journey. He urged senior managers to adopt new leadership approaches focused on accountability, discipline, and measurable results. According to Adedeji, public trust in the tax system will depend not on speeches but on visible improvements in service delivery, predictable revenue growth, and a resilient revenue framework that can withstand economic volatility.

source: punch