Nigeria’s sweeping economic reforms have been credited with steering the country away from a looming fiscal crisis, as Chairman of the National Revenue Service (NRS), Zacch Adedeji, defended the policy direction of the current administration.
Speaking at a high-level event, Adedeji said the government inherited an economy at a “critical inflexion point,” weighed down by limited fiscal space, weak investor confidence, and deep structural imbalances across key sectors.
According to him, the administration did not pursue gradual adjustments but instead opted for a full-scale overhaul of the economic system, anchored on tough but necessary reforms.
He identified the removal of fuel subsidy, unification of exchange rates, and the naira-for-crude initiative as the cornerstone policies that have helped stabilise the economy.
Adedeji disclosed that without these interventions, Nigeria’s inflation rate could have spiralled to between 75 and 120 per cent annually, far above current levels estimated at about 15 per cent.
He stressed that maintaining the fuel subsidy would have severely strained public finances. At an oil price of $120 per barrel, he noted, subsidy payments could have risen to between N38 trillion and N52 trillion annually—potentially consuming up to 76 per cent of the Federal Government’s N68 trillion budget.
Describing the subsidy removal as unavoidable, Adedeji said the decision was driven by fiscal reality rather than political convenience.
On foreign exchange reforms, he explained that unifying the multiple exchange rates eliminated distortions that had encouraged arbitrage and worsened inflation.
Before the reforms, the official exchange rate ranged between N460 and N700 to the dollar, while the parallel market traded as high as N3,500 to N4,500, creating significant instability.
He added that the policy shift has helped steady the naira, restore investor confidence, and ease inflationary pressures.
Adedeji further revealed that Nigeria’s external reserves have strengthened considerably, rising from below $2 billion in a no-reform scenario to about $34 billion currently.
In terms of fiscal performance, he pointed to a sharp increase in domestic revenue, which grew from N6.8 trillion five years ago to N28.7 trillion in 2025.
The improvement, he said, was driven by tax reforms, better compliance, and enhanced governance structures.
He also highlighted the consolidation of over 60 fragmented tax laws into a more streamlined framework, aimed at improving efficiency and predictability without imposing additional tax burdens on citizens.
The NRS chairman noted progress in fiscal governance, including stricter monitoring of public funds, improved transparency, and the rollout of the National Single Window to modernise trade operations.
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In the energy sector, Adedeji said the naira-for-crude initiative has repositioned the industry, reducing pressure on foreign exchange while supporting domestic supply.
He described the commissioning of the NRS headquarters as symbolic of Nigeria’s broader reform agenda, noting that the facility represents institutional renewal and a commitment to fiscal discipline.
The complex, consisting of three towers and 16 floors, is designed to accommodate over 3,000 staff and serve as a hub for efficient tax administration.
Adedeji maintained that although the reforms have been challenging, they have laid a solid foundation for long-term economic stability and sustainable growth.
In his keynote address, President Bola Ahmed Tinubu reaffirmed the government’s commitment to economic restructuring, stating that the reforms were deliberate steps to restore stability, strengthen institutions, and rebuild public trust.
Tinubu emphasised that no nation can achieve lasting prosperity with a weak and fragmented revenue system, adding that transparency, discipline, and accountability remain central to his administration’s economic vision.
He said the government’s policy direction is focused on eliminating systemic inefficiencies and creating an environment that supports investment, growth, and national development.