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Almost Half of Nigeria’s Revenue Goes to Debt Servicing – Oyedele
Nigeria now spends less than 50 percent of her revenue on debt servicing, down from 90 percent where it was two years ago.
The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee (FPTRC), Taiwo Oyedele, made the disclosure in Lagos on Monday, while presenting his keynote at PwC’s Executive Summit on Nigeria’s Tax Reform.
It held under the theme “The New Tax Era: What Nigeria’s Tax Reform Means to Individuals and Businesses”, and Oyedele highighted that the government was spending almost 97 percent of its revenue on debt servicing before the economic reforms.
“We’ve cleared unmet forex futures that were more than $7bn. And we moved from under $4 bn external reserve to over $20bn today. Budget deficit is declining, and we’re spending more on infrastructure.
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“Tax to GDP ratio moved from under 10 percent is now 13.5 percent in two years. Instead of 97 percent, service debt is now under 50 percent in two years. We no longer print money to spend. Rather, we’ve paid down part of the ways and means that the previous administration printed,” he stated.
He explained that the country’s currency could have become worthless if the Federal Government had not embarked on the current economic reforms.
According to him, Nigeria was heading in the direction of Zimbabwe and Venezuela, whose economies had collapsed.
“Nigeria today, without reforms, would have looked like that. Bigger deficits, more naira printed. We will have easily over $10bn unmet forwards. Tax to GDP ratio will be less than 10 percent. We’ll be spending over 100 percent of our revenue to service debts. You hold money; you will not find PMS to buy. There’ll be more poverty, and there will be more ways and means.
“I thought to bring the currency. I’ll show you. So, this currency, this banknote in my hand, is 100 trillion Zimbabwean dollars. I’m not 100 trillion one notes. This note, at the time I got it, was barely enough to buy a loaf of bread. I gave my friend, whom I got this from, $10 and he is still grateful till tomorrow. This is what would have happened to Nigeria. Nigeria was the road to Venezuela and Zimbabwe.”
According to the FPTRC chair, the country could have reached a $1bn economy by now if the government had begun the ongoing economic reforms a decade ago.
“If some of these reforms that were done in the past two years had been done 10 years ago. I tell you authoritatively today, Nigeria will be a $1bn economy guaranteed. And the price of PMS will be under N300/litre because the exchange rate will be under N300 to the USD.
“We’ve done this analysis over the past 10 years. Comparable balance of payment between Nigeria, Kenya and South Africa. Yet naira has lost six and a half times more value than Kenya shillings and South African rand. If only we had maintained the same level of stability as those two other countries. Nigeria will be a $1tn economy. What that means is the size of the middle class will probably be 10 times what it is. Every single investor in the world will take a seriously enough about,” Oyedele asserted.
He argued that the government was wasting trillions of naira subsidising petrol, spending a large chunk of its revenue to service debt and was just printing naira at will.
“We committed them to subsidise PMS. It still wasn’t enough. NNPC took the taxes they were supposed to pay and they used that as well. It was not enough. They started taking the taxes of the other operators in the industry to also pay for the PMS. It still wasn’t enough. If we had continued till this day, the subsidy regime would have collapsed.
“Naturally, you would hold N100,000; you will not find a litre of PMS to buy. And I said that with all sense of responsibility. Responsibility because we’re running out of fiscal space to deal with the subsidy.
“Many people like you, including myself, knew there was a lot of corruption in it. That’s true. Could we have removed the corruption in the time frame? No. We had a huge budget deficit. We printed over N30tn to spend. We’re not building roads. It wasn’t that we’re building electricity. We were paying salaries,” he emphasised.
“Many people like you, including myself, knew there was a lot of corruption in it. That’s true. Could we have removed the corruption in the time frame? No. We had a huge budget deficit. We printed over N30tn to spend. We’re not building roads. It wasn’t that we’re building electricity. We were paying salaries,” he emphasised.
Oyedele disclosed that only three per cent of informal sector operators could pay taxes in Nigeria.
He explained, “From our analysis, it is only the top three per cent of the informal sector that has the ability to pay. Therefore, in these reforms, we have legally exempted the bottom 97 per cent from paying taxes. Let them breathe. When they grow, they will have the capacity to pay. And many people would ask me, ‘Are you sure that all the companies in Nigeria will not become small?’.
“This will happen anywhere in the world if you create an exemption threshold. People want to force themselves to be under the threshold. Isn’t it because they don’t want to pay tax? It’s hard to pay tax anywhere in the world. Nigerians are not bad people. They’re not worse than people who live in other countries where things work. The difference is the system. So, the system we are building is that if you like to go and lie and say your business is small when it is not, we will find out, and there shall be consequences for those who underdeclare and engage in tax evasion.”
According to the FPTRC chair, the country’s tax is now progressive, and all the major taxes have become progressive.
Oyedele also disclosed that the gazette of the recently signed tax law was being printed in Lagos, and the final copy of the tax would be released to the public afterwards.
Recall that President Bola Tinubu signed four bills into law on June 26, but they would become effective on January 1, 2026.
Also, the Regional Senior Partner, PwC West Market Area, Sam Abu, noted that the reforms embarked on by the government were a good starting point for engaging in that conversation very robustly.
“Policy alone won’t deliver. Real change requires partnership and commitment. It required every single one of us here, the government, business leaders, and private sector individuals, to collaborate and work together to shape what will come up, to shape the kind of society and the kind of business community that we want to operate together, that we want to believe is okay. It requires us to engage with the spirit of these reforms, with sincerity, with integrity and with optimism,” he emphasised.
He said perspectives of stakeholders were critical in ensuring that those reforms take root and deliver on the outcomes that had been promised.
“Everybody has had a part to play in this regard. So, a PWC objective is clear. We want to remove complexity from tax. We want to help our clients anticipate risk and deliver solutions that are practical and tailored to their businesses, so that you, as business leaders, can focus on what you do best, which is making an impact on growing your businesses,” Abu added.
Major highlights of the new tax law are the exemption of employees who earn less than N800,000 annually from the personal income tax, the harmonisation of federal taxes and making the Federal Inland Revenue Service the sole collector of federal taxes.
Meanwhile, Partner and Tax and Regulatory Service Leader, Chijioke Uwaegbute, added that with the new tax law, by January 1, 2026, an entity that is resident abroad will be fully taxed in Nigeria if it is being controlled from the country.
“Control meaning where the board sits and things like that, or it is being effectively managed in Nigeria, being where the people who make the decisions sit. That is potentially a big one.
“Similarly, we have rules around indirect transfers as well. I have a situation where you dispose of or there’s a disposal of the shares of a foreign entity that owns a Nigerian company. And if that disposal means that there’s a change in the ownership of the Nigerian company, that disposal then is seen as a taxable event in Nigeria, not minding the fact that the shares that were disposed of are not of the Nigerian company.
“So all of these rules that we see here are really to reflect some of the advances we’ve seen in other countries, minimise opportunities for avoidance and ensure that Nigeria is able to tax its fair share of taxes,” he said while highlighting major changes in the new tax law.
The Secretary to the Government of the Federation (SGF), Senator George Akume, on Tuesday charged members of the Board of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to uphold the highest standards of corporate governance, ensure accountability and transparency, and maintain regulatory independence in the discharge of their duties.
He gave the charge in Abuja during the inauguration of the NUPRC Board, alongside that of the National Agricultural Land Development Authority (NALDA), describing both ceremonies as critical milestones in the Federal Government’s drive to strengthen governance frameworks, deepen sectoral reforms and accelerate inclusive national development.
Akume said the inauguration of the NUPRC Board marks a key step in the implementation of the Petroleum Industry Act (PIA), enacted to reposition the country’s petroleum sector through enhanced regulatory clarity, institutional independence and adherence to global best practices.
According to him, the Board, as the apex governance body of the Commission, is expected to provide strategic oversight, policy direction and institutional stability necessary to boost investor confidence, optimise revenue generation and promote sustainable development in the upstream petroleum sector.
In a statement issued by his Special Adviser on Media and Publicity , Yomi Odunuga, Akume said “the establishment and inauguration of this Board underscore the Federal Government’s commitment to ensuring that Nigeria’s upstream petroleum resources are managed transparently, efficiently and in the best interest of the Nigerian people”.
He noted that the appointments reflect a deliberate selection of individuals with proven competence, integrity and professional experience, expressing confidence that their collective expertise would advance the objectives of the PIA.
“Members of the Board, your charge is clear. You are to uphold the highest standards of corporate governance, ensure accountability and transparency, and work constructively with management and stakeholders while maintaining regulatory independence,” Akume said.
The SGF stressed that integrity, diligence and fidelity to the law must guide the Board’s decisions, noting that public trust and national interest depend on their stewardship.
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He added that the exercise aligns with the Renewed Hope Agenda of President Bola Ahmed Tinubu, which prioritises strong institutions, the rule of law and integrity in public service, noting that effective regulation of the upstream sector remains central to economic growth, energy security and fiscal sustainability.
In a separate ceremony inaugurating the NALDA Board, Akume reaffirmed the Federal Government’s commitment to agricultural transformation as a key pillar of national development.
He described NALDA as a strategic vehicle for poverty eradication, food security enhancement, job creation and rural transformation, noting that its mandate to drive agricultural land development is critical to achieving national development goals.
The SGF highlighted ongoing initiatives such as the Renewed Hope Mega Farm Estates, designed as modern mechanised agricultural hubs with integrated irrigation, processing infrastructure and farmer settlements.
He also listed complementary programmes including the Renewed Hope Restoration Project for vulnerable groups, the Green Hope Project focused on climate-smart greenhouse farming, and the Aqua Hope Project aimed at expanding structured aquaculture systems.
According to him, these initiatives are already yielding positive outcomes in food production, employment generation and rural economic growth, while supporting the administration’s broader objective of economic diversification.
“As we look ahead, NALDA is expected to scale up its programmes across more states, strengthen the use of technology, and expand opportunities for youth and women in agriculture,” he said.
Akume emphasised that the NALDA Board would play a crucial role in providing strategic direction, effective oversight and management support required to consolidate the Authority’s gains and ensure the successful delivery of its mandate.
He urged members of both Boards to approach their assignments with a strong sense of duty, patriotism and commitment to national development, assuring them of the Federal Government’s support.
Responding on behalf of the NUPRC Board, Chairman, Senator Magnus Abe, expressed appreciation to President Tinubu for the opportunity to serve, pledging that the Board would not disappoint.
“We are very grateful to the President and we want to assure him through you that we will not disappoint him,” he said, adding that the Board would work closely with management to deliver on the objectives of the PIA.
Similarly, chairman of the NALDA Board, Kabir Abdullahi Barkiya, described the appointments as a call to service, assuring that the Board would provide sound governance, transparency and accountability in supporting the Authority’s mandate.
“As a Governing Board, our mandate is clear: to provide strategic direction, ensure sound governance, and uphold transparency and accountability in the discharge of our duties,” Barkiya said.
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has charged the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) to push for the revival of moribund refineries across Nigeria.
PETROAN National Public Relations Officer, Dr Joseph Obele, in a congratulatory message on the emergence of Salimon Oladiti as NUPENG President, emphasized that restoring these refineries will promote healthy competition in the downstream sector, prevent monopolistic dominance, create employment opportunities across the value chain, and significantly boost national economic development.
He stressed that functional refineries will also enhance energy security and reduce dependence on imported petroleum products.
Obele, on behalf of PETROAN President, Dr. Billy Gillis-Harry, described the development as a major consolidation within the downstream petroleum sector.
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He noted that Oladiti’s emergence represents continuity, unity, and a renewed commitment to collaboration among key industry stakeholders.
He expressed confidence that under the new leadership, the welfare of petroleum workers will be further strengthened, while the collective voice of stakeholders will become more vibrant and influential in advancing national development.
Also, commended the service of the former President, Williams Akporeha, noting that his tenure witnessed remarkable achievements, including improved staff welfare, significant salary enhancements, infrastructural development such as the NUPENG national headquarters, and the maintenance of industrial peace and a stable working environment.
He reaffirmed PETROAN’s commitment to continued partnership with NUPENG in promoting efficiency, stability, and shared prosperity across Nigeria’s oil and gas industry.
In addition, he encouraged the new NUPENG leadership to consolidate a productive and mutually beneficial relationship with the Dangote Refinery, noting that strong collaboration between organised labour and major refining operators is essential for operational stability, fair market practices, and the overall growth of Nigeria’s petroleum industry.
“PETROAN remains confident that under Comrade Oladiti’s leadership, NUPENG will continue to foster industrial harmony, deepen stakeholder engagement, and protect the collective interests of workers and operators in the downstream petroleum sector,” he added.
The Nigeria Labour Congress (NLC) has warned that a monthly salary of ₦1 million has become practically worthless to Nigerian workers due to the continued instability of the naira and rising inflation.
NLC President, Joe Ajaero, made this known on Tuesday in Abuja during an interview with the News Agency of Nigeria (NAN), where he expressed concern over the declining purchasing power of workers across the country.
According to Ajaero, the focus of organised labour is not just on increasing wages, but on ensuring that the value of the naira is strong enough to sustain workers and their families.
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“Even if Nigerian workers earn ₦1 million, it will not be meaningful if the naira has no value,” he said. “What we need is a stable currency that can carry workers through the month.”
He lamented that the persistent rise in the cost of living has made it increasingly difficult for Nigerians to afford basic necessities, including food, transportation and housing.
The NLC boss noted that the ongoing discussions surrounding a new national minimum wage must follow due legal process and cannot be rushed.
“The minimum wage has not been negotiated yet. It is governed by law and tied to a review cycle. When the time comes, we will begin the process ahead of its expiration,” Ajaero explained.
He called on the federal government to take urgent steps to cushion the impact of inflation, stressing that current economic conditions have worsened the hardship faced by workers.
Ajaero also linked the growing economic pressure to rising fuel prices, which he said have significantly increased transportation costs and driven up food prices nationwide.
“We raised concerns when global factors began to affect local fuel prices, but unfortunately, the situation has not improved,” he said.
The labour leader further emphasised the need for Nigeria to build a resilient energy policy that can shield the country from external economic shocks.
“It is not ideal that developments in other parts of the world automatically translate into hardship for Nigerians. We must create systems that protect our economy,” he added.
On pension matters, Ajaero raised concerns about the emergence of multiple pension unions, warning that the development has created confusion within the system.
He disclosed that the NLC is engaging stakeholders to address the issue and ensure proper coordination, particularly in the areas of deductions and remittances.
Speaking ahead of the upcoming Workers’ Day celebration, Ajaero revealed that any protest actions would be limited to states that have not fully implemented the approved minimum wage.
“Any protest will not be nationwide. It will only take place in states that have failed to comply with the minimum wage implementation,” he clarified.
He, however, acknowledged that while many states have complied, some are yet to fully implement the policy, especially at the local government level and in the education sector.
He also pointed out issues with consequential salary adjustments, noting that some states are paying only the minimum wage without properly adjusting other salary structures.
“These are technical issues we must address. We will assess compliance levels before May Day,” he said.
Ajaero reaffirmed the commitment of the NLC to continue advocating for policies that will improve workers’ welfare and ensure economic stability.
He also commended the federal government for reviewing peculiar allowances and approving a 100 per cent duty tour allowance for civil servants, expressing hope that the measures will be effectively implemented.
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