Sani Musa: Nigeria’s Fiscal Position Undergoing Correction

The Chairman of the Senate Committee on Finance, Senator Sani Musa, speaks with Sunday Aborisade on Nigeria’s fiscal health, revenue reforms, debt sustainability, and expectations from the new leadership of the Ministry of Finance. Excerpts:

Nigeria continues to grapple with revenue shortfalls and rising debt. How would you assess the country’s current fiscal health, and what urgent corrective measures are required?

Nigeria’s fiscal position is under strain, but it is also undergoing a necessary correction driven by ongoing reforms. For years, structural inefficiencies—particularly fuel subsidies, weak revenue mobilisation, and foreign exchange distortions—masked the true state of public finances while worsening debt vulnerabilities. The current reforms are restoring fiscal credibility. Subsidy removal, exchange rate unification, and efforts to widen the tax base are improving transparency and strengthening government capacity to meet obligations more sustainably.

The priority now is to consolidate these gains by accelerating non-oil revenue through efficient tax administration, deepening expenditure discipline, and channeling savings into high-impact sectors such as infrastructure, agriculture, and social protection. Rebuilding investor confidence through policy consistency and institutional strengthening is equally critical.

With inflation and cost-of-living pressures rising, how can fiscal policy better complement monetary efforts to stabilise the economy?

There must be strong coordination between fiscal and monetary policy. Fiscal policy should prioritise targeted relief instead of broad subsidies by expanding social safety nets, supporting food production, and easing supply bottlenecks. Government spending must be disciplined and focused on productivity-enhancing investments that increase supply and reduce structural inflation. Improving revenue efficiency is also key to limiting deficit financing and easing pressure on monetary policy. Ultimately, fiscal policy should protect vulnerable groups, boost domestic production, and reinforce macroeconomic stability.

What structural weaknesses have persisted in Nigeria’s revenue framework?

Three major issues stand out: overdependence on oil revenues, a narrow and inefficient non-oil tax base, and weak remittance performance from government-owned enterprises.

These challenges persist due to policy inconsistency, weak institutional capacity, entrenched subsidy regimes, and resistance to reforms that promote compliance and broaden taxation.

Nigeria’s tax-to-GDP ratio remains low. What reforms are being considered to expand the tax base?

The focus is on expanding the tax base, not increasing tax rates. This includes bringing more participants—especially from the informal sector—into the tax system through simplified frameworks, harmonising multiple taxes, and digitising tax administration to reduce leakages.

At the same time, low-income earners will be protected through exemptions, while nuisance taxes will be eliminated.

How can the government plug revenue leakages across key sectors?

Technology, transparency, and enforcement are critical. In oil and gas, there must be real-time tracking and full remittance enforcement. In customs, 100 per cent cargo scanning and automated systems should reduce human discretion.

For government enterprises, strict compliance with remittance obligations and regular audits are essential. Stronger data integration and sanctions will ensure all due revenues are captured.

What role does technology play in improving tax compliance?

Technology is central. Integrated databases across agencies can create a unified taxpayer view, helping to detect under-reporting. Digital tools such as e-filing, e-invoicing, and automated payments reduce inefficiencies and opportunities for evasion. This shifts the system from discretion-based to data-driven, improving transparency and revenue collection.

What are your expectations of the new Minister of Finance, Taiwo Oyedele?

The expectation is that he should deepen fiscal reforms by expanding revenue through efficiency rather than increasing the tax burden. There must also be decisive action to plug leakages across oil, customs, and public enterprises.

Restoring investor confidence through policy consistency and transparency is critical. Debt management must also be handled prudently to avoid crowding out growth.

Given his strong background in tax policy and public finance, I expect him to sustain reforms that promote stability and economic growth.

How can the Ministry of Finance and the National Assembly collaborate more effectively?

Collaboration should begin from the policy design stage through structured consultations. There must be alignment on fiscal priorities, anchored on the Medium-Term Expenditure Framework.

Improved technical coordination and joint monitoring of implementation will also ensure timely passage and effective execution of reforms.

Are there key legislative priorities the minister should pursue immediately?

Yes. These include tax reforms that simplify compliance and expand the base, laws to plug revenue leakages through automation and transparency, and stronger debt management frameworks. A critical priority is transitioning to a Priority-Performance-Based Budgeting System to ensure that public spending is tied to measurable outcomes.

Nigeria’s budget implementation has faced criticism. What reforms are needed?

Nigeria must move from input-based to performance-based budgeting, where spending is linked to measurable results.

Project preparation must improve so only viable projects are included in the budget. There should also be strict quarterly monitoring, improved procurement transparency, and better coordination among implementing agencies.

How can the National Assembly strengthen oversight of borrowed funds?

Loans must be tied to clearly defined projects before approval. There should be quarterly reporting, independent audits, and close tracking of funds from disbursement to execution.

Oversight should focus on ensuring that borrowed funds translate into visible, impactful projects.

What is the Senate’s position on rising public debt?

Borrowing should only be for productive, growth-enhancing projects—not for consumption.

To avoid a fiscal crisis, Nigeria must enforce stricter debt limits, boost revenue, and improve spending efficiency. Borrowing must remain transparent and tied to measurable economic returns.

Should Nigeria explore asset monetisation and public-private partnerships?

Yes. Asset monetisation and well-structured PPPs can reduce reliance on borrowing by unlocking value from underutilised assets and mobilising private capital for infrastructure.

However, transparency, proper valuation, and strong regulatory oversight are essential to protect national interests.

How can fiscal policy improve the welfare of ordinary Nigerians?

Fiscal policy must focus on inclusive growth. This includes targeted social protection, pro-poor investments in agriculture, healthcare, and education, and coordination to reduce inflation pressures. There must also be stronger accountability at subnational levels and a shift toward performance-based budgeting to ensure real improvements in living standards.

How can government spending better support vulnerable populations while maintaining discipline?

Spending should be more targeted by replacing broad subsidies with verified social safety nets. Investments should prioritise critical sectors like health, education, and agriculture.

Improved accountability and coordination will ensure resources reach those most in need while maintaining fiscal stability.