Nigeria borrowing warning as Taiwo Oyedele says the country must reduce debt reliance and strengthen tax reforms for growth

The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, on Tuesday warned that Nigeria could no longer rely heavily on borrowing to finance development, stressing the urgent need for a sustainable fiscal system capable of supporting critical sectors of the economy.

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Oyedele spoke in Abuja during the 28th Annual Tax Conference of the Chartered Institute of Taxation of Nigeria.

The minister’s remarks came barely 24 hours after reports emerged that the Federal Government had intensified discussions with the World Bank over a fresh $1.25bn loan intended to support economic reforms, job creation and competitiveness.

“Nigeria cannot continue to finance development primarily through borrowing. We must build a fiscal system capable of sustainably supporting critical infrastructure, quality education, affordable healthcare, security, and social protection,” Oyedele said.

The minister explained that sustainability involved more than revenue generation, adding that the government must also promote economic growth, reduce inequality, protect vulnerable groups and encourage productivity.

Speaking on the Nigeria Borrowing Warning, Oyedele said the Federal Government’s ongoing tax reforms were designed to strengthen fiscal sustainability while making the economy more attractive to investors.

According to him, Nigeria’s tax system had for years suffered structural weaknesses, including multiple taxation, fragmented administration, weak compliance and excessive dependence on a narrow revenue base.

“Businesses faced overlapping debts, unpredictable enforcements, and rising compliance costs. Citizens often perceived the tax system as unfair because the burden was unevenly distributed,” he said.

Oyedele described the situation as unsustainable, noting that government revenues had remained insufficient to meet Nigeria’s growing development needs.

He added that the reforms were intended to build a resilient fiscal foundation for long-term national development rather than introduce changes for political convenience.

“Our approach is guided by a simple principle: a good tax system should raise revenue efficiently, support economic growth, protect the vulnerable, and strengthen trust between governments and citizens,” the minister said.

Oyedele disclosed that minimum wage earners had been exempted from personal income tax under the reforms, while low and middle-income earners were expected to benefit from reduced tax burdens.

On corporate taxation, the minister said the government was proposing reductions in companies’ income tax rates to improve Nigeria’s competitiveness as an investment destination.

He also said the government was modernising the Value Added Tax framework by expanding input VAT credits and clarifying exemptions for essential goods and services.

“This reduces cost buildup within the economy and improves efficiency across the value chain. This also helps to moderate inflation,” Oyedele added.

The minister further lamented the burden of multiple taxes and levies on businesses, revealing that the government was collaborating with subnational authorities to harmonise taxes and reduce compliance costs.

According to him, 15 states had already enacted tax harmonisation laws, while others were being encouraged to follow suit.

Oyedele also highlighted the central role technology would play in future tax administration, saying the government was prioritising automation, digital filing systems, data integration and technology-driven compliance frameworks.

Despite the reforms, the minister acknowledged lingering challenges, including weak institutional capacity, difficulties integrating the informal sector and low public trust.

Also speaking at the conference, Vice-President Kashim Shettima defended the administration’s tax reforms, describing them as pro-people and pro-business policies aimed at lifting millions of Nigerians out of poverty.

Represented by Special Adviser to the President on Economic Affairs, Tope Fasua, Shettima said the administration of President Bola Tinubu was working towards building an economy where Nigerians could prosper regardless of social background.

The vice-president also admitted that public scepticism and misinformation remained major obstacles to the reforms.

“Many Nigerians simply cannot believe it because it has never happened before,” he said.

Earlier, the 17th President and Chairman of Council of the Chartered Institute of Taxation of Nigeria, Innocent Ohagwa, described the new tax regime as the most comprehensive overhaul of Nigeria’s fiscal structure in more than 30 years.

Ohagwa said the reforms aligned with the government’s ambition of growing Nigeria into a $1tn economy before the end of the decade.

A notable highlight at the conference came when former Edo State governor, Adams Oshiomhole, called for higher taxes on wealthy Nigerians, including owners of private jets and individuals earning above N20m monthly.

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Oshiomhole argued that taxation remained central to governance and national development, insisting that affluent citizens should contribute more towards infrastructure, healthcare, education and social safety nets.