Nigeria must reduce its dependence on borrowing and build a stronger domestic revenue base to secure fiscal stability and fund development sustainably, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has said.
Edun spoke on Tuesday at the management retreat of the Nigerian Revenue Service (NRS) in Abuja, warning that the global financial environment had become increasingly hostile to developing economies. He said rising global interest rates and tighter financial conditions had made debt-driven financing more expensive and less viable.
“And of course, we need to reduce our dependence on debt. And so, revenue mobilisation within this context is a developmental imperative,” Edun said.
He noted that multilateral cooperation was weakening, with countries prioritising domestic interests and scaling back cross-border financial support. Citing 2024 data, Edun said developing countries paid about $163bn in debt service, compared with $42bn in overseas development assistance and $97bn in foreign direct investment, underscoring a negative external funding balance.
“The primary anchor of our fiscal sustainability is going to be our own fiscal efforts, our own ability to generate savings, which then can be used for investment,” he said. “And before you can generate savings, you have to have the revenue.”
Edun linked Nigeria’s rising debt pressures to global shocks such as the COVID-19 pandemic, geopolitical conflicts and trade tensions, which have increased borrowing needs while raising debt service costs. He said sustainable domestic revenue was critical to funding infrastructure, healthcare, education and support for vulnerable populations.
His remarks come amid indications from the Senate that fresh borrowing remains unavoidable. At a public hearing on the 2026 Appropriation Bill, Chairman of the Senate Committee on Appropriations, Olamilekan Adeola, said weak revenue inflows and large development gaps made continued borrowing inevitable.
“Nigeria cannot help but keep borrowing because revenue inflows are unpredictable and development needs are enormous. What matters is how we borrow and how we fund our deficits,” Adeola said.
Edun described ongoing tax reforms as central to reducing reliance on debt, adding that stronger compliance and effective execution were essential. “No fiscal reform can deliver results if compliance is weak or uneven. Yet compliance cannot be achieved through enforcement alone. It is a carrot and stick,” he said, stressing that trust and transparency in the tax system were vital to improving collections.
NRS Executive Chairman Zacch Adedeji said the new agency represented a break from the past and carried the responsibility of delivering measurable results. He urged senior managers to adopt new leadership approaches and ensure that reform efforts translate into improved revenue performance and stronger public trust.
