The World Bank has projected that Nigeria’s revenue-to-GDP ratio could rise to over 10.5% by the end of 2024, driven by a significant increase in government revenue. Recent reports indicate that the Nigerian government experienced a 100% rise in revenue, reaching ₦9.1 trillion in the first half of 2024 compared to the same period last year.

Ndiamé Diop, World Bank country director for Nigeria, shared this forecast during an interactive session on ‘Fiscal Reforms for a More Secure Future’ at the 30th Nigerian Economic Summit. He emphasized the importance of sustaining key fiscal reforms, including the unification of foreign exchange rates and the removal of fuel subsidies.

“Revenue has been increasing significantly, surpassing the cost of fuel subsidies,” Diop noted, highlighting the positive impact of digital reforms aimed at enhancing tax compliance.

Historically, Nigeria has ranked low globally in terms of revenue-to-GDP ratio. Before the reforms introduced under President Bola Tinubu’s administration, debt servicing in 2022 consumed 100% of the country’s revenue, with public expenditure at 12.9% of GDP. Diop pointed out that only 7.6% of that expenditure was covered by government revenue, resulting in a persistent fiscal deficit.

“There was mostly a fiscal deficit, which means debt. You cannot do that year in, year out, without facing a crisis,” Diop warned, stressing the urgency of fiscal reforms to stabilize the economy.

In related remarks, Wale Edun, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, outlined government initiatives to address inflation through increased food production. He stated that the government aims to engage one million smallholder farmers during the dry season, providing essential inputs such as seeds, fertilizers, and herbicides.

“This initiative is expected to yield approximately five million tonnes of grains, helping to ease the cost of living for Nigerians,” Edun said. Additionally, he highlighted a collaboration with the African Development Bank (AfDB) to establish agricultural processing zones to support domestic industries.

As Nigeria continues to grapple with economic challenges, these developments underscore the need for ongoing fiscal reforms and strategic investments in key sectors.

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