Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr. Taiwo Oyedele, has revealed that Nigeria now spends less than 50% of its revenue on servicing debt — a major drop from the 97% recorded before recent economic reforms.
He made this known on Monday while speaking at PwC’s Executive Summit on Nigeria’s Tax Reform held in Lagos. The event focused on the impact of the country’s new tax policies on individuals and businesses.
Oyedele explained that the Nigerian government had made significant progress in stabilizing the economy by reducing its reliance on borrowing and cutting wasteful spending, especially on fuel subsidies.
“Instead of printing money to cover budget deficits, we are now paying down some of the loans taken by the previous administration. External reserves have grown from under \$4 billion to over \$20 billion,” he said.
He added that the country’s tax-to-GDP ratio has increased from less than 10% to 13.5% in two years, and that budget deficits are also dropping.
Oyedele warned that without these reforms, Nigeria could have ended up like Zimbabwe or Venezuela, where the economy collapsed due to hyperinflation and uncontrolled public spending.
Holding up a 100 trillion Zimbabwean dollar note, he said, “This note could barely buy a loaf of bread. That’s where Nigeria was headed. We were printing trillions of naira, subsidizing petrol, and yet there was nothing to show for it — no roads, no power, just salaries.”
He also noted that if similar reforms had started 10 years ago, Nigeria’s economy could have grown to \$1 trillion by now, with fuel prices below N300 per litre and a stable naira.
“The country wasted trillions on subsidies and still had fuel shortages. Even taxes collected by oil companies were used to pay for fuel subsidies, and it still wasn’t enough,” he said.
Oyedele stressed that the government had little choice but to act, saying the reforms were necessary to stop the economy from collapsing completely.
