The Federal Government has announced plans to introduce a nationwide savings scheme aimed at reducing the country’s dependence on borrowing and encouraging more Nigerians to invest in the economy.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, disclosed this on Tuesday in Abuja during a panel session at the launch of the latest Nigeria Development Update by the World Bank.
Edun said the proposed scheme would allow Nigerians across different income levels to save money and earn returns, while also contributing to national development.
According to him, the initiative is part of broader efforts by the Federal Government to shift away from heavy reliance on borrowing, especially at a time when global and domestic debt costs are rising.
“There are mass savings schemes which allow people at all levels of society to save and earn income, including from investments in companies such as refineries and other large firms listed on the stock exchange,” he said.
Nigeria has, over the years, relied heavily on borrowing to finance its budget and fund infrastructure projects. However, rising interest rates and increasing debt servicing costs have raised concerns about the sustainability of this approach.
Edun explained that the government is now focusing on alternative funding options, particularly domestic savings and equity participation, as a way to mobilise resources within the country.
“We do not intend to keep going to the debt markets, especially at the current high cost, both locally and internationally,” he said.
The minister noted that the new approach is also aimed at attracting private sector investment, which is seen as critical for economic growth and job creation.
He said the government is working to create an environment where private capital can thrive, adding that public funds alone are not enough to meet the country’s development needs.
Beyond the savings scheme, Edun highlighted several reforms being implemented to strengthen public finances and improve transparency.
One of these measures involves better monitoring of government revenues. He said all revenue-generating ministries, departments, and agencies have now been placed on a unified platform that allows the government to track expected earnings and confirm actual receipts.
“We can now see what is expected and ensure that it is actually received,” he said.
This move is expected to reduce leakages and improve accountability in government finances, a long-standing challenge in Nigeria.
The minister also revealed that the government is reviewing the cost-of-collection framework used by some agencies. Under this system, agencies retain a portion of the revenue they collect as operational costs.
However, Edun stressed that any excess revenue belongs to the government and must be properly accounted for.
“We are shining a light on this to ensure efficiency and transparency,” he said.
As part of efforts to further strengthen financial management, the government has introduced forensic audits to check spending and ensure value for money.
“Forensic audits help us verify that the government is not overpaying and that public funds are being used properly,” he said.
In addition to revenue reforms, the government is also exploring ways to make better use of its assets. Edun said strategies such as privatisation, divestment, and public-private partnerships are being considered to improve efficiency and generate revenue.
These measures are expected to reduce the financial burden on the government while encouraging private sector participation in key sectors of the economy.
The minister also pointed to ongoing efforts to reduce the cost of governance, including personnel-related expenses. He said cutting unnecessary spending is essential for improving fiscal stability.
Nigeria’s rising debt profile has been a major concern in recent years, with a large portion of government revenue going towards servicing loans.
Edun revealed that interest rates on government borrowing have increased sharply, rising from about eight per cent to as high as 24 per cent by late 2024.
This increase has made borrowing more expensive and has put additional pressure on public finances.
To address this, the government is implementing a combination of reforms aimed at boosting revenue, controlling spending, and attracting investment.
On the broader economy, Edun said Nigeria has remained resilient despite global challenges, including the impact of conflicts in the Middle East on energy markets.
He noted that while global oil prices have risen, supply has remained stable, allowing the Nigerian economy to continue functioning.
“There is resilience that keeps the economy moving,” he said.
However, he acknowledged that higher oil prices come with both benefits and challenges. While they can increase government revenue, they can also lead to higher costs and inflation.
Nigeria, as a major oil-producing country, depends heavily on crude oil exports for revenue. Changes in global oil prices often have a direct impact on the country’s economy.
Edun said the government is taking a cautious approach to the uncertain global environment.
“We are hoping for the best, but planning for the worst,” he said.
He attributed the country’s resilience to ongoing reforms under the administration of President Bola Tinubu, including changes to foreign exchange management and fuel pricing.
According to him, these reforms have created a more market-driven economy, with opportunities for investment and growth.
“We now have market-based pricing of foreign exchange and petroleum products, and an economy that offers opportunities,” he said.
The minister highlighted that investment remains the key to reducing poverty and improving living standards in Nigeria.
He said both large-scale and small-scale investments are needed to create jobs and drive economic growth.
“The way to lift millions of Nigerians out of poverty is through investment,” he said.
He encouraged Nigerians to take advantage of emerging opportunities in the economy, particularly through savings and investment schemes.
Earlier at the opening session of the G-24 Technical Group Meeting in Abuja, Edun reiterated that Nigeria is shifting from expensive external borrowing to a growth model driven by domestic reforms and private capital.
They note that many Nigerians are still struggling with low incomes and high living costs, which may affect their ability to save.
However, they believe that with the right incentives and strong financial systems, the initiative could help mobilise funds for development and reduce the country’s reliance on debt.
As the government moves forward with its plans, many Nigerians will be watching closely to see how the new strategy unfolds and whether it delivers the expected benefits for the economy.