FG Shifts from Borrowing to Mass Savings Drive to Tackle Rising Debt, Says Edun

* Explains N40trn revenue projection for 2025 faces ₦10trn cash reality

* Senate urges FIRS to intensify public education on new tax reform laws

Sunday Aborisade in Abuja

The Federal Government has unveiled a strategic shift away from heavy reliance on borrowing towards mobilising mass savings among Nigerians as a sustainable response to the country’s rising debt profile, the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, said on Monday.

Edun spoke at an interactive session on the 2026–2028 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) organised by the Senate Committee on Finance at the National Assembly, where he provided a detailed overview of the government’s fiscal position, revenue challenges and policy direction.

According to the minister, while Nigeria’s total public debt has risen to about N152 trillion from roughly N70 trillion in 2023, a significant portion of the increase did not result from fresh borrowing but from transparency-driven adjustments and exchange rate realignments.

He explained that about N30 trillion of the debt stock arose from the formal recognition and regularisation of Ways and Means financing that had previously been kept outside government books, while nearly N50 trillion resulted from exchange rate adjustments following Central Bank reforms to clear foreign exchange backlogs and rebuild reserves.

Edun said: “Consequently, about N80 trillion of the total debt stock did not represent new borrowing, but rather a process of reclassification, regularisation and adjustment.”

The minister stressed that the focus of the MTEF was not on increased borrowing but on strengthening revenue and fiscal sustainability.

He acknowledged that revenue performance had consistently fallen short of projections, creating pressure on budget implementation. 

In 2024, the total revenue was estimated at about N25.9 trillion, but actual Federal Government revenue stood at approximately N8.27 trillion. 

Similarly, for 2025, projected revenue of about N40 trillion contrasts sharply with expected actual cash revenue of roughly N10 trillion.

As a result, Edun said treasury management measures and borrowing were used to bridge funding gaps, underscoring the urgency of a more realistic and robust revenue framework going into 2026.

To address this, he disclosed that the government was rolling out a comprehensive revenue optimisation programme anchored on automation, digitalisation, technology deployment and process re-engineering. 

Four circulars, he said, had already been issued directing revenue- and investment-generating ministries, departments and agencies (MDAs) to migrate to a transparent digital platform, halt cash collections and remit revenues directly to the Treasury Single Account (TSA) without netting off costs.

On budget implementation, the minister noted that the capital component of the 2024 budget had been extended into 2025, with funding fully available for completed projects up to September and remaining portions planned for rollover into the 2026 budget. 

For the 2025 capital budget, he said about 30 per cent was currently funded, with approvals in place and plans to carry forward the balance, subject to National Assembly support.

Despite revenue shortfalls, Edun said government had consistently met critical obligations, including salaries, pensions, statutory transfers and debt servicing.

However, he emphasised that long-term economic sustainability required a shift beyond revenue collection to broad-based mobilisation of domestic savings.

He said: “For a country to sustainably grow its economy, especially where about 90 per cent of economic activity is driven by the private sector, there must be broad-based mobilisation of savings.”

Edun revealed that President Bola Tinubu was considering a public-private partnership (PPP) initiative aimed at mobilising mass savings across the population, extending beyond the relatively small pool of Nigerians with pension or stockbroking accounts.

The initiative, he said, was designed to encourage tens of millions of Nigerians to save and invest productively, providing domestic capital to support growth while easing pressure on government borrowing.

Edun said: “This is the context within which we are examining the Medium-Term Economic Framework, the revenue side, the debt profile and the policy initiatives being implemented to strengthen the economy.”

Meanwhile, the Chairman of the Senate Committee on Finance, Senator Sani Musa, has called on the Federal Inland Revenue Service (FIRS) to embark on aggressive nationwide public enlightenment to prepare Nigerians for the new tax reform laws scheduled to take effect from January next year.

Musa warned that poor public understanding could undermine the gains of the far-reaching reforms being finalised by the National Assembly.

According to him, “With the kind of reforms that are coming, there will be serious issues if Nigerians are not properly enlightened,” urging the FIRS, in collaboration with the Ministry of Finance and other agencies, to intensify communication so that citizens would clearly understand the implications of the new tax architecture.

He explained that the reforms were aimed at simplifying compliance, harmonising incentives and closing long-standing revenue leakages, while still supporting investment and exports. 

As part of the changes, he said only 25 per cent of goods produced in special economic and free trade zones would be allowed into Nigeria’s customs territory duty-free, with the remainder attracting applicable taxes and duties.

“We have realised that a lot of revenue has been missed over the years. These reforms are meant to close those gaps while still supporting investors to use Nigeria as a base to export across Africa and to the rest of the world,” Musa said.

He added that the Senate would conduct investigative hearings after the Christmas recess to assess budget performance of MDAs and government-owned enterprises, insisting that stronger revenue outcomes would be demanded under the new fiscal regime.

“The reforms are intended to strengthen tax administration and management, not to punish Nigerians. That message must be clearly communicated,” he said.