Nigeria’s fiscal position is gradually improving, with the government now spending less than 50 percent of its revenue on debt servicing — a sharp drop from the 97 percent recorded prior to recent economic reforms.
According to The PUNCH, this was revealed by Mr. Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee (FPTRC), during PwC’s Executive Summit in Lagos.
Oyedele, who also serves as Fiscal Policy Partner and Africa Tax Leader at PwC, said the reforms have helped stabilise the economy and averted what could have been a catastrophic economic collapse.
“We’ve moved from under $4 billion in external reserves to over $20 billion today,” Oyedele stated. “Our tax-to-GDP ratio, which used to be below 10 percent, is now 13.5 percent. Before these reforms, we were spending 97 percent of our revenue just to service debts. Today, that figure is under 50 percent.”
He noted that the reforms included clearing unmet forex futures worth over $7 billion and reducing the country’s dependence on money printing to cover expenditures. Oyedele warned that without these interventions, Nigeria could have gone the way of Zimbabwe or Venezuela, where excessive deficits and currency depreciation led to economic collapse.
“This 100 trillion Zimbabwean dollar note I’m holding was worth barely a loaf of bread,” he said while displaying the currency. “That could have been Nigeria’s reality. We were printing money to pay salaries, not to build roads or improve power supply.”
According to Oyedele, the subsidy on petrol was unsustainable and heavily corrupt.
“We committed trillions of naira to fuel subsidy, yet it wasn’t enough. The NNPC even used taxes they were meant to remit. If the subsidy had continued, you could be holding N100,000 and still not find a litre of petrol to buy,” he said.
He argued that had the reforms been implemented a decade ago, Nigeria would have been a $1 trillion economy by now, with a stable exchange rate and a significantly lower petrol price.
“If these reforms had been in place ten years ago, Nigeria’s economy would have reached the $1 trillion mark. The naira would be under N300 per dollar, and fuel would sell below N300 per litre,” Oyedele asserted. “The size of our middle class would have been 10 times what it is today.”
On taxation, Oyedele highlighted that only the top three percent of Nigeria’s informal sector can afford to pay taxes. As a result, the bottom 97 percent have been legally exempted from paying taxes under the new tax reforms.
“Let them breathe,” he said. “When they grow, they’ll be able to pay. But for those who underdeclare or evade taxes, there will be consequences.”
He also confirmed that the new tax law, signed by President Bola Tinubu on June 26, is being gazetted and will take effect from January 1, 2026. Among its key features is the exemption of employees earning less than ₦800,000 annually from personal income tax.
The law also consolidates federal tax collection under the Federal Inland Revenue Service and targets foreign-based entities effectively managed from Nigeria.
Speaking at the event, PwC West Africa’s Regional Senior Partner, Mr. Sam Abu, commended the government’s efforts but called for wider collaboration to ensure the reforms deliver real impact.
“Policy alone won’t deliver change,” Abu said. “It takes government, business leaders, and individuals working together with sincerity, integrity, and optimism to build the society and economy we all want.”
He noted that PwC’s goal is to remove complexities in the tax system and support businesses in navigating risks with tailored solutions.
