Nigeria is moving away from its traditional reliance on concessional funding to a more aggressive strategy centered on domestic revenue mobilization and asset optimization, Finance Minister and Coordinating Minister of the Economy, Wale Edun, said on Friday.

Speaking at a news conference following Nigeria’s participation at the 2025 International Monetary Fund (IMF) and World Bank Spring Meetings in Washington D.C., Edun explained that the government under President Bola Ahmed Tinubu is determined to wean the country off dependence on external concessional loans from institutions such as the World Bank, bilateral donors, and agencies including the European Union, Germany, and France.

According to Edun, the administration’s strategy has shifted away from the previous practice of heavy external borrowing, including raising commercial dollar funds through Eurobonds, toward a focus on boosting internal revenue and optimizing government assets.

“Raising commercial funds from Nigerians, then Nigerian diasporas saving in dollars by buying government dollar-denominated Eurobonds, and then ultimately going to the Eurobond market has run its course,” Edun said. “The focus now is on domestic revenue mobilization.”

The finance minister highlighted that Nigeria had made considerable progress in improving its debt profile with international institutions. He disclosed that the country’s consistent quarterly repayments to the IMF over the past two years have resulted in an 87.5 percent reduction in outstanding obligations. If this trend holds, Nigeria is expected to fully clear its IMF debt by mid-2025, a milestone Edun described as a “significant achievement” in strengthening the country’s financial governance.

Beyond revenue reforms, Edun emphasized that the broader economic strategy is to foster private-sector investment. Rather than the government leading major projects, the Tinubu administration aims to create an environment where private capital can drive investments in key sectors like infrastructure, transportation, and the digital economy.

“The philosophy and strategy of the administration of President Bola Ahmed Tinubu is to crowd in the private sector so that they can come in and invest across the board: infrastructure, digital, toll roads,” he said.

Mobilizing Domestic Revenue – An Uphill Climb

However, the domestic revenue mobilization agenda is not without serious challenges. One major hurdle lies in the tax component of the plan, which has so far faced strong headwinds from economic realities and public resistance.

The federal government’s efforts to reform the tax system — particularly around Value Added Tax (VAT) and other consumption taxes — have encountered stiff resistance. Earlier attempts to review VAT upwards triggered widespread pushback, with state governments also pushing back over control of VAT collection. In 2021, for instance, Rivers and Lagos states dragged the federal government to court over who should collect VAT within their jurisdictions, sparking a fierce legal and political battle that remains unresolved.

Also, the ongoing presidential proposed tax reform bills have sparked opposition, particularly from Northern Nigeria, which fears that the reforms could shortchange the region’s federal allocation, exacerbate economic hardship, and leave the region impoverished.

These tensions have complicated efforts to streamline and enhance tax revenue at the federal level.

Moreover, the economic downturn has severely depleted Nigeria’s tax base. As inflation bites deeper and businesses close, the number of individuals earning taxable income has drastically shrunk. Recent government policy decisions are also expected to have an impact.

In a bid to cushion the effects of hardship, the federal government exempted workers earning the minimum wage from paying personal income tax. With the national minimum wage currently standing at N70,000 monthly — and with more than 50 percent of Nigerians earning 50 percent less than that amount, according to 2023 data from Enhancing Financial Innovation and Access (EFInA), the pool of taxable individuals has become significantly narrower.

In essence, while the government seeks to mobilize more funds internally, the harsh reality is that there simply are not enough people with sufficient income to tax at the scale required to fill Nigeria’s revenue gaps.

The problem runs deeper. Even among the shrinking number of higher earners, voluntary tax compliance remains weak, and many in the informal sector, which accounts for nearly 60 percent of the economy, operate entirely outside the tax net.

As Edun and his team push forward with a model that prioritizes tax and asset-driven revenue over borrowing, questions remain about whether the broader economic structure can sustain such an ambitious shift without deep and inclusive reforms to widen the tax base, improve compliance, and stimulate real income growth.

The shift comes amid Nigeria’s continued battle with revenue shortfalls, high debt servicing costs, and mounting economic pressures triggered by global headwinds. With limited fiscal space and escalating demands for social and infrastructure spending, the government is now betting on domestic solutions to shore up its finances.

Edun’s comments reflect a broader narrative emerging from the Spring Meetings, where policymakers from developing countries faced increasing pressure to build more resilient and self-reliant economies rather than depending excessively on external borrowing, especially in a high-interest-rate global environment.

Nigeria must achieve sustained GDP growth of about 7 percent if it hopes to meaningfully reduce poverty and raise the living standards of its citizens, says the Minister of Finance and Coordinating Minister of the Economy, Wale Edun.

Edun made the comment while responding to questions at a press briefing following the conclusion of the 2024 Spring Meetings of the International Monetary Fund (IMF) and World Bank in Washington, D.C.

While acknowledging that Nigeria’s economy is currently growing at an average rate of 3.4 percent in 2025, with the latest quarterly figure recorded at 3.84 percent, Edun stressed that this pace is insufficient to lift millions of Nigerians out of poverty.

“Unless we get to about 7% growth, we’re not going to substantially reduce poverty and improve the life of Nigerians,” he said. “That is the target and commitment of this administration.”

However, the optimism expressed by the minister stands in contrast to projections from the IMF and World Bank. According to the IMF’s latest forecast, Nigeria’s GDP is expected to grow by only 3.0 percent this year. The World Bank’s outlook is only marginally higher at 3.6 percent. These projections highlight a major gap between the government’s ambitions and the country’s economic reality.

More critically, Nigeria, once Africa’s largest economy, has now dropped to the fourth largest on the continent, falling behind South Africa, Egypt, and Algeria, according to IMF data. The decline in relative economic size underscores the severity of Nigeria’s growth challenges. Against this backdrop, analysts argue that to reverse this trend and meaningfully tackle poverty, Nigeria would need to double its current growth rate — a monumental task given the country’s present economic trajectory.

The World Bank has already warned that Nigeria’s poverty crisis is set to deepen, with millions more expected to slip into poverty by 2026 if urgent measures are not taken. In a recent report, the World Bank revealed that Nigeria now accounts for 15 percent of the world’s poorest people. It stressed the need for policies that promote inclusive growth, enhance food security, and strengthen social protection systems — areas that mirror the priorities Edun highlighted at the Washington briefing.

To reach the 7 percent growth rate, Edun outlined several strategic focus areas. He stressed the importance of boosting agricultural productivity, expanding the nation’s digital infrastructure, supporting young entrepreneurs through e-commerce initiatives, and improving access to finance across all business segments. He noted that structural reforms, particularly in the financial sector, are being prioritized, with the Central Bank of Nigeria (CBN) working alongside regulators to remove capital access bottlenecks and stimulate broader economic activity.

Edun also spoke extensively about the administration’s renewed focus on social protection programs, aimed at shielding the country’s most vulnerable citizens from the harsh effects of economic reforms. He said the direct benefit transfer (DBT) system has been revamped to ensure monthly digital payments are made to verified individuals through their bank accounts or mobile wallets, using biometric registration linked to the National Identification Number (NIN) for greater transparency.

Currently, about one million individuals are enrolled in the program, but efforts are ongoing to enroll three million more every month. The national social register, which is projected to eventually represent around 20 million households, is being expanded and verified digitally to allow swift government intervention during future economic shocks.

Even with these efforts, analysts, and economists believe that attaining a 7 percent growth rate anytime soon may be unrealistic. Many argue that Nigeria’s current economic fundamentals — characterized by soaring inflation, weak industrial output, high unemployment, insecurity, policy inconsistency, and infrastructure deficits — make such aggressive growth targets extremely difficult to achieve.

Furthermore, economists have pointed out that while President Bola Tinubu’s administration has embarked on reforms such as the removal of fuel subsidies and the unification of exchange rates, the immediate fallout from these policies — rising cost of living, weakened consumer demand, and declining purchasing power — is likely to slow growth in the short-to-medium term rather than accelerate it.

With GDP growth projected to hover between 3.0 and 3.6 percent, the gap between aspiration and reality appears stark. The World Bank’s warning that millions more Nigerians could be pushed into extreme poverty by 2026 adds to the growing pressure on the government to not just implement reforms, but to find ways to cushion the devastating social impacts they are causing.

Ultimately, while Edun’s remarks reflect an aspirational vision for Nigeria’s future, the road to 7 percent growth will demand far more than promises. Economists have noted that it will require consistent, well-coordinated policy execution, massive private sector participation, drastic improvements in infrastructure and security, and a social protection system capable of absorbing the shocks of economic adjustments.