The Chairman of the Federal Inland Revenue Service (FIRS), Zacch Adedeji, has said borrowing by the Nigerian government should not be viewed as a sign of financial failure, but as a normal and strategic part of modern governance.
Speaking during a press briefing in Abuja, Adedeji explained that government borrowing is a globally accepted tool for managing national budgets and driving development, especially in developing countries like Nigeria.
His comments come amid rising public debate over Nigeria’s debt levels and the government’s continued borrowing despite claims of improved revenue performance.
“Borrowing is not a sign of weakness,” Adedeji stated firmly. “It is a normal tool in the budgeting process. No country in the world runs its economy purely on income without the support of credit.”
He clarified that the Tinubu administration has taken firm steps to bring more order and transparency to government finances. One major action, he said, was the discontinuation of the controversial “Ways and Means” arrangement, where the Central Bank of Nigeria (CBN) printed money to finance government spending without proper checks.
“One of the key decisions of Mr President was to collateralize Ways and Means,” he said. “We stopped printing money. The whole outstanding amount was restructured as a federal government loan, and we are now servicing it — both principal and interest.”
According to Adedeji, this decision has brought more discipline into the system and has helped reduce pressure on the exchange rate. He said this is part of the reason why the naira has seen some stability in recent months.
The FIRS chairman addressed public concerns that the government should stop borrowing if revenue targets are being met. He responded that achieving revenue goals does not eliminate the need for borrowing, especially when national spending plans are much larger than available income.
“Some people ask, ‘If we’re meeting revenue targets, why are we still borrowing?’ But the right question is: are we borrowing within the budget approved by the National Assembly? And the answer is yes,” he said.
He highlighted that every national budget has three major components: expenditure, revenue, and debt. These three must work together to ensure that the country can meet its responsibilities, including salaries, infrastructure, security, and social services.
Adedeji also highlighted how government borrowing contributes to the wider economy. When the government borrows from commercial banks and pays interest, those banks are able to pay salaries, and their staff pay taxes. Businesses that earn profits from related contracts also pay taxes. According to him, this cycle supports both public and private sector growth.
“Borrowing is part of the economic chain,” he noted. “Banks earn interest, they pay workers, workers pay taxes, and businesses also pay their dues. It all feeds back into the system.”
The FIRS boss insisted that borrowing becomes dangerous only when used recklessly. He said the Tinubu administration is committed to borrowing responsibly, mainly to fund infrastructure that will generate long-term benefits.
He gave the example of roads, saying loans used to build roads are sustainable because such infrastructure makes economic activities easier, boosts trade, and increases tax revenue in the long run.
“Loans used for productive projects like roads are not wasteful,” he said. “If a good road helps a business grow, that business will pay more tax, and the government can use that revenue to repay the loan.”
Under the Tinubu administration, the FIRS has been under pressure to raise more revenue without increasing the tax burden on Nigerians. The agency has focused on improving tax collection efficiency, closing leakages, and widening the tax base to include more citizens and businesses.
Adedeji said this strategy is already yielding results, allowing the government to reduce reliance on excessive borrowing and inflationary practices like money printing.
He also reassured Nigerians that all borrowing is done in line with the Fiscal Responsibility Act and with full approval from the National Assembly.
“Transparency and accountability are central to what we do. Nigerians deserve to know that loans taken in their name are used wisely,” he said.
As Nigeria continues to tackle economic challenges including inflation, exchange rate volatility, and public debt, the FIRS chairman urged citizens to focus on the bigger picture.
“The real goal is to build a stable economy where public services work, businesses grow, and people thrive. Responsible borrowing helps us move toward that goal,” Adedeji concluded.
