“Our Economy Is Trapped” – Tinubu Vows To End Nigeria’s Over-reliance On Loans

President Bola Tinubu has vowed to end Nigeria’s over-reliance on borrowing to finance public spending.

He spoke on Tuesday at the inauguration of the presidential committee on fiscal policy and tax reforms.

The committee, set up on July 7, 2023, is chaired by Taiwo Oyedele, a tax and fiscal policy expert. The committee, which comprises experts from both the private and public sectors, is responsible for the various aspects of tax law reform, fiscal policy design and coordination, harmonisation of taxes, and revenue administration.

Speaking at the event, the president said the committee is in line with his promise to remove all barriers impeding business growth in Nigeria.

“The consequences of the ongoing failure of our tax regime are real and significant. The inability of the government to efficiently raise revenue has led directly to an overreliance on borrowing to finance public spending,” Tinubu said.

“A government that cannot properly fund itself will also lack the flexibility or fiscal scope to sensibly manage the economy or respond to external shocks.

Instead, debt service begins to consume an ever greater portion of the government’s already meagre revenues. “This traps the economy in a vicious cycle of borrowing simply to service previous debt and leaves almost no scope for socio-economic development.

“As President, I am determined to end this cycle. On the day of my inauguration, I promised that my administration would address all of the issues impeding investment and economic growth in Nigeria. This promise is why I saw an end to the fuel subsidy. It is the reason the Central Bank has called an end to its multiple exchange rate system under my watch.

“It is for the same reason we gather here today to inaugurate the Presidential Committee on Fiscal Policy and Tax Reforms.”

On his part, Zacchaeus Adedeji, special adviser to the president on revenue, said the inauguration of the committee would give it the opportunity to further engage with various stakeholders to identify their pains and critical concerns bothering on tax and fiscal policies, as well as collectively develop the solutions necessary to address the challenges in a holistic manner.

Also speaking at the event, Oyedele said that those who evade tax get away with little or no consequences, adding that there needs to be a change. He said Nigerians are willing to pay tax if they see what it translates to.