Ayo Teriba to FG: Discard Oil, Tax Revenues Illusions, Embrace Equity Financing, Assets Monitising

*FG: No going back on implementation of tax reform

Dike Onwuamaeze

The Chief Executive Officer of The Economic Associates Limited, Dr. Ayo Teriba, has advised the federal government to jettison the illusions of oil and tax revenues and embrace asset monitisation and equity financing in order to sustain the macroeconomic stability that was achieved in 2025.

Teriba gave this advice while speaking on ‘Policy Options for Government and Emerging Business Opportunities’, at the 2026 Economic Review and Outlook Conference that was hosted by the Lagos Chamber of Commerce and Industry (LCCI).
President of LCCI, Mr. Leye Kupoluyi, said that  the conference remained “one of the most respected platforms in Nigeria for rigorous economic dialogue, evidence-based policy engagement, and forward-looking conversations about our nation’s economic future.”

The conference also featured the Chairman of Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele, and Special Adviser to President Tinubu on Economic Affairs, Dr. Tope Fasua.
They debunked the misinformation that the government has pulsed the implementation of the new tax reform laws.
In his presentation, Teriba said it is “time for government to do away with all the illusions they have about oil revenue.
“Second, we have tax illusion in Nigeria. I am an economist and I understand that our economy has been in recession for a full decade,” and has declined from at least $700 billion that it was in 2019 to about$250 billion presently.

“Therefore, I am not optimistic that we will find any significant tax revenue out of an economy that is in decline and is just managing to start finding recovery. I hope that this message will not be lost on Mr. Taiwo Oyedele and his committee,” Teriba said.

He added that this is a wrong time for Nigeria to be aspiring to attain 18 per cent tax revenue ratio to the GDP.

“The economy is just getting out of recession for crying out loud.

“And to give the recovery a chance, this is time to give tax holiday,” Teriba said.

He also advised the government to do away with its dependence on issuance of debt instruments for fiscal sustenance.

According to him, Nigeria has over borrowed to the extent that federal revenues no longer cover federal interest payment obligations.

He said, “So look beyond oil; look beyond taxes and look beyond debt. Contemplate non-oil revenue. Contemplate non-debt financing. I do not know any economy that has made a headway without resorting to large scale equity issuance.

“I do not know why Nigerian Government prefers debt financing and does not even consider doing equity financing at all that has helped Saudi Arabia to forge ahead, made India to become 4th largest economy in the world and has helped Brazil to remain in the 10 largest economies in the world.”

Teriba said that Nigeria should emulate countries like the United Arab Emirate and Saudi Arabia that are more buoyant on revenues by relying on asset financing instead of tax revenues.

“Nigeria needs to demonstrate that it knows how to attract FDIs. Our record on attracting FDIs has been very poor.

“The easiest way to attract FDIs is to come up with a list of assets that will be taken to the market to raise equity.

“So, what real estate, infrastructure, assets, rail, electricity transmission, airports Nigeria is bringing to the capital market to raise equity?

“Let us finance the bulk of our capital requirements with equity issuance. If we can do this I see the gains of 2025 being kept and multiplied.”

He, however, regretted that the administration of President Bola Ahmed Tinubu has been paying lip service to assets monitisation, equity financing and PPP since its inception and has never done anything about them.

“It is more likely to go and issue debts in the Euro-bond markets than go and issue equity in the global market,” he said.

Teriba projected that “in 2026 the Naira will get even more stable and stronger.

“I am expecting to see single digit inflation and sustained decline in interest rate.”

Reacting to the options that were canvassed by Teriba, the Special Adviser to President Tinubu on Economic Affairs, Dr. Fasua, said that listing assets like stadiums, airports and so on and getting concessionaires might be perceived as personalising public assets in a manner that would provoke political backlash.

He said, “Some of the ideas proposed by Teriba in terms of monitising assets I think one of the problems is that it may be political in nature because people may say ‘now you want to start all the assets of the country.’

“It may not be that easy but it is a lovely idea which can get some traction,” in the future.

Fasua also said that the Nigerian governments are running one of the smallest budgets in the world on a per capita basis, adding that at 40 per cent debt to GDP ratio, Nigeria could still leverage more on the debt market.

He also stated unequivocally that there is no stopping the implementation of the new tax laws, adding that their transparent implementation “is going to change a lot of things for this country.

“I think Teriba does not think that the tax will increase the revenue of government. I disagree with him on that because to a large extent the economy is still largely informal.

“I believe, from my studies, that Nigeria has the biggest informal sector per capita in the world.

“This is what the tax review is trying to change by encouraging those that have businesses to register.

“And when we begin to see results from the tax reform we may not have to borrow N24 trillion in 2026.”

He added that the federal government is actually targeting between 6.0 and 8.0 per cent GDP growth in 2026.

Fasua also clarified that it is easy for people to believe that all the revenues from the sale of crude oil go to the public coffers without knowing that a large chunk of them go to Nigeria’s joint venture partners in the exploration and production of petroleum.

He said, “When we say that Nigeria is selling 1.8 mbpd at $64 someone will take his calculator and shout that Nigeria is making so much money.

“But what is Nigeria’s share of that is about 40 per cent.

“We are producing with venture companies with production sharing contracts and so international oil companies owns majority of that money.”

Speaking on ‘The Implication of New Tax System and Implications for Business and Investment: New Trends in Nigeria’s Tax System’, the Chairman of Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele, disagreed with Teriba that the time is not yet ripe for implementing the tax reform that would drive the country’s quest for increased tax revenue.

Oyedele said that excessive tax burden is one of the reasons the economy has been struggling, which the new tax laws are meant to resolve.

He said, “I was a little bit confused because his point is that the economy is struggling.

“But it is struggling because there are excess tax burden.

“Therefore, let us take that burden away so that businesses can breathe.”

According to him, businesses whose turnover is below N100 million should not pay tax against the previous threshold of N25 million.

This new law also moved the threshold for payment of income tax from monthly salary of N30,000 to N100,000.

He explained that “the key feature of this tax reform is to ensure fiscal equity and fairness by letting those who earn more to pay a little bit more otherwise we will widen inequality and worsen social discontent.

“It  also reduced the Capital Income Gain tax from 30 per cent to 25 per cent.”

Oyedele argued that sustainable revenue is important if we really want a society that works, adding that “it is in our enlightened self-interest to allow the tax system to work.”

He said, “It is easy to say that government is corrupt and we should not be paying taxes.

“We have two significant fundamental challenges. One, how we spend our revenue. Two, the revenues are small.

“Even if you eliminate corruption and waste, Nigeria will still be a very poor country.

“All governments’ budgets are under $70 billion for a country of over 200 million people.

“This reform will facilitate economic growth and shared prosperity.

“Teriba questioned the quest to increase tax revenue to 18 per cent of GDP.

“This projection is over the next three years and will come by closing the tax gap by enabling everyone to pay tax; rationalising wasteful incentives and removing discretionary powers to grant waivers and also ensuring this revenue will come from economic growth, particularly when it is inclusive.”