Taxing, Borrowing the Future Without Building: What Has Nigeria’s Fiscal Authority Done for the Real Sector?

BY BLAISE UDUNZE

In today’s Nigeria, one uncomfortable truth has become glaring that the fiscal authority collects, but it does not build. It borrows, but it does not produce. It taxes, but it does not empower. For years, the Nigerian government has pursued fiscal policies more obsessed with revenue than with results.

The removal of fuel subsidy in 2023 was supposed to mark a new dawn. It was sold to Nigerians as a path to fiscal freedom as a step that would redirect over $10 billion annually from consumption subsidies to capital investment, infrastructure, health care, education and job creation. Two years later, that promise has vanished into a fog of political spending and bureaucratic complacency.

The question now is not how much the government has collected, but what it has done with it. What tangible impact have these revenues from taxations and borrowings had on the real sector which is the part of the economy that actually produces goods, creates jobs, and drives development?

A Fiscal Authority Fixated on Taxation, Not Production

Nigeria’s fiscal policy in recent years has tilted dangerously toward aggressive revenue collection. Under immense pressure to grow non-oil income, the Federal Inland Revenue Service (FIRS) has expanded its reach to virtually every corner of the economy. From VAT on electricity and telecommunications (data usage) to call credits, bank transactions to stamp duties on bank transfers, to levies on postal deliveries for online purchases, almost nothing escapes the government’s tax net.

The average Nigerian entrepreneur now faces a labyrinth of taxes such as company income tax, education tax, signage fees, land use charges, and a myriad of local levies. Yet the same entrepreneur operates in an environment defined by power shortages, failing infrastructure, forex volatility, and regulatory uncertainty. These are not conditions for business growth; they are conditions for extinction.

Taxation, in principle, should be a partnership between the state and the productive class as a social contract that trades compliance for development. But in Nigeria, taxation has become punishment, not partnership. The fiscal authority appears to be taxing poverty to sustain bureaucracy. It has forgotten that the strength of any economy lies not in how much it extracts, but in how much it enables.

Taxing Without Building

For a government that collects billions of naira daily from taxes, surcharges, levies, and newly designed revenue streams, it is difficult to find any visible reflection of these revenues in the productive base of the economy.

Based on FIRS and government releases, tax collections amounted to about N34 trillion in 2023-2024, and non-oil receipts reached around N20.6 trillion in January to August 2025, indicating total government collections of at least N50-N55 trillion since mid-2023, depending on how partial-year and FAAC items are aggregated and without double counting.

The contradiction is glaring that Nigeria’s fiscal managers have become more efficient at collecting taxes but less effective at building the economy that sustains those taxes.

The reality is sobering. SMEs that stand as the true backbone of national productivity are closing shop in droves. The cost of diesel, transportation, and rent have tripled, while the naira’s freefall continues to eat away at margins. Rather than offer relief, fiscal agencies have tightened the noose with new charges and penalties. The result is a climate of exhaustion and economic fatigue.

Borrowing Without Building

If taxation is squeezing businesses dry, borrowing is suffocating the nation’s future. As if taxes were not enough, Nigeria’s fiscal authorities have doubled down on borrowing, amassing debts at an unprecedented rate. These have resulted to spiral of loans justified in the name of development but rarely seen in tangible outcomes.

As of mid-2025, Nigeria’s total public debt has ballooned to N152.4 trillion, a staggering 348.6 percent increase since President Bola Tinubu assumed office in June 2023, when the figure stood at N33.3 trillion. For a country already struggling to meet basic obligations, this is unsustainable.

Reflecting on the wider African context, the picture is equally alarming. The continent’s external debt now exceeds $1.3 trillion, with debt servicing costs hitting $89 billion this year alone. Nigeria is one of the hardest hits, not merely by the size of its debt, but by its lack of productive return.

Even as businesses groan under the weight of multiple taxation, the Federal Government has kept its foot firmly on the borrowing pedal. Between July and October 2025, Nigeria’s fiscal authorities secured over $24.79 billion (plus €4 billion, ¥15 billion, N757 billion, $500 million in Sukuk) in new borrowings and facilities, the bulk of which were justified as “development financing.” Yet the real sector still awaits to feel the promised impact.

Over 25 percent of Nigeria’s annual revenue now goes into debt servicing, leaving little fiscal space for investment in health, education, or industry. Experts warn that when over 90 percent of government revenue is consumed by old debts, governance becomes survival, not progress.

Uche Uwaleke, professor of finance and capital markets at Nasarawa State University, said the high cost of debt repayment continues to undermine the country’s economic potential.

“Nigeria’s debt service ratio is inimical to economic development, chiefly because what could have been used to build infrastructure and invest in human capital is used to service debt,” Uwaleke told BusinessDay. “The opportunity cost for the country is high. To ensure debt sustainability, the government should tie future borrowings to self-liquidating projects that can generate revenue to repay the loans.”

At the 2025 IMF and World Bank Annual Meetings in Washington D.C., global leaders again pledged to tackle developing countries’ debt burdens. But as Nigeria’s borrowing continues unchecked through Eurobonds, sukuk, and bilateral loans. The question Nigerians should be asking is simple, who benefits from all this borrowing?

What is more troubling is the government’s pattern of borrowing to service past debts and fund recurrent expenditures. Instead of financing projects that create value, loans are spent plugging budget holes. The chain of debt grows longer, and the productive economy remains static.

We are witnessing a fiscal irony as in a nation borrowing to survive, not to thrive.

The Missed Opportunity of Subsidy Savings

The removal of fuel subsidy was supposed to free up capital for productive investments. Instead, it has freed up more money for recurrent consumption. Subsidy funds are now shared monthly among the three tiers of government, with no visible developmental footprint.

Nigerians were told that the subsidy windfall would improve power supply, roads, and transport infrastructure. But more than a year later, there is little to show.

In one of the world’s largest oil producing nations, fuel prices quintupled, increasing more than 514 percent from N175 in May 2023 to N900. Across the country, small businesses are closing down; transport fares remain unbearable; and electricity supply remains erratic. The fiscal authority appears to have replaced subsidy waste with revenue waste.

Instead of using subsidy savings to ignite productivity, the funds have been channeled into the same unsustainable cycle of political spending, salary payments, and administrative overheads. This is not reform, it’s redistribution without responsibility.

Where Is the Fiscal Policy Coordination?

The disconnect between Nigeria’s fiscal and monetary authorities has become a fundamental barrier to progress. While the Central Bank of Nigeria (CBN) tightens liquidity to control inflation, the fiscal authority simultaneously floods the economy with new taxes and levies, inflating business costs and undermining the same stability the CBN is trying to achieve.

The contradictions are endless. The CBN preaches financial inclusion, yet fiscal agencies impose bank transfer duties that discourage banking usage. The CBN claims to promote SME credit schemes, yet fiscal authorities drain disposable income with new taxes.

This absence of policy synergy sends mixed signals to investors and citizens alike. Businesses cannot plan, investors cannot forecast, and even the government’s own intervention funds lose impact. Nigeria’s economic management, as it stands, resembles an orchestra without a conductor.

State Governments as the Silent Beneficiaries

While the federal government collects the bulk of taxes, state governments have become silent beneficiaries of the subsidy savings. Each month, they receive billions from FAAC allocations swollen by oil receipts, VAT, and subsidy removals.

Based on data from NEITI and OAGF/NBS monthly communiqués, the conservative FAAC disbursement total from June 2023 to June 2025 stands at approximately N25.65 trillion, covering only months with publicly available and verifiable reports.

Yet, few states have anything to show for it. Industries are dying, roads are deteriorating, and capital budgets are chronically underfunded. In many states, governance has been reduced to salary payments and political campaigns, not development.

Nigeria’s fiscal success cannot be measured by how much Abuja collects but by what states deliver. Development is a chain, if one link is weak, the entire system collapses. Yet, most states continue to depend on federal allocations as a feeding bottle rather than a development engine.

The federal fiscal authority cannot claim progress while sub-national governments squander shared revenues without accountability. Until FAAC allocations are tied to measurable developmental outcomes, Nigeria will keep sharing poverty, not prosperity.

The Real Sector being Neglected and Starved

Nigeria’s real sector, particularly SMEs continues to suffer neglect. Despite contributing about 48 percent of GDP, accounting for over 90 percent of businesses and employing over 80 percent of the workforce, SMEs receive less than 5 percent of total bank credit. Fiscal policy has done little to change that.

Rather than providing targeted tax reliefs, infrastructure subsidies, or credit guarantees, government policies have worsened the cost of doing business. The manufacturing sector’s growth rate remains sluggish, and capacity utilisation in many factories has dropped below 50 percent.

Manufacturers grapple with power cuts, forex scarcity, and multiple taxation. Many are forced to rely on expensive diesel generators, further eroding competitiveness. Import duties remain high, ports are congested, and logistics costs keep rising.

Ajayi Kadiri, Director-General of the Manufacturers Association of Nigeria (MAN), recently captured this frustration bluntly:

“We can’t plan under fiscal chaos. Manufacturing in my village is extremely expensive. Multiple levies, some without a legal basis, are suffocating businesses. You can wake up one day and see a 50 percent increase in port charges without prior consultation. That’s not policy that’s chaos.”

Kadiri’s statement is more than an industry complaint; it is a mirror of national dysfunction. When manufacturers cannot plan, the economy cannot grow. When fiscal policy becomes unpredictable, investment flees. The result is a landscape of abandoned factories, unemployed youth, and shrinking export potential.

In effect, the fiscal authority is extracting value without creating it. Government has become an expert in revenue collection but a failure in economic coordination.

The Human Cost of Fiscal Mismanagement

Behind the numbers lies a painful reality. Every percentage increase in tax or tariff translates into higher prices, lower wages, and fewer jobs. The removal of subsidy without a viable safety net pushed millions deeper into poverty. Despite the inflation claimed to have eased to 18.02 percent from 20.12 is still eroding purchasing power and diminished consumer demand, which is the lifeblood of production.

The market woman who pays for electricity she rarely gets, the manufacturer laying off workers due to diesel costs, the young entrepreneur crushed by levies, as these are not statistics. They are the casualties of a fiscal system that prioritises collection over compassion.

Instead of designing targeted support, energy rebates, SME tax credits, or rural infrastructure programs the fiscal authority has chosen the easier path by taking more from those already struggling. This short-term approach sacrifices long-term productivity for instant revenue gratification.

Need for Building, Not Just Taxing

To rescue the economy, Nigeria’s fiscal managers must adopt a production-first mindset. A nation cannot tax or borrow its way to prosperity. It must produce, build, and export its way there.

Rebalance fiscal priorities.

– Channel subsidy savings into infrastructure, agro-industrial hubs, and SME credit facilities not recurrent spending.

– Reward production, not compliance. Offer tax breaks for local manufacturers, exporters, and innovators.

– Enforce fiscal transparency. Every borrowed dollar should be tied to measurable outcomes, with clear public reporting.

– Align fiscal and monetary policy. End the contradiction between tax expansion and credit tightening.

– Demand state-level accountability. States must show what they are doing with FAAC allocations through verifiable projects, not political slogans.

The Urgency of a Fiscal Rethink

Nigeria’s fiscal policy has lost its moral and developmental compass. It has become a machine that extracts without empowering as a structure more focused on sustaining government than building an economy.

Taxation should create an environment where businesses thrive. Borrowing should build the future, not mortgage it. And subsidy savings should become the foundation of national renewal, not political redistribution.

Until Nigeria’s fiscal authorities understand that revenue collection is not development, and that loans are not progress, the economy will remain trapped in a vicious cycle of taxing without building, borrowing without producing, and spending without transforming.

Blaise, a journalist and PR professional writes from Lagos, can be reached via: [email protected]

*KEYAMO AS A SYNONYM FOR AVIATION REFORMS

By Achile Achimugu

The Minister of Aviation and Aerospace Development, Chief Festus Keyamo, enjoys many positive faces, making him ubiquitous and an all-round achiever. Truth is, anywhere he is placed, he performs in absolute unbeatable stewardship marked by tangible improvements.

Today, this bundle of proficiency and talents is progressively driving positive reforms, aimed at gradually reshaping Nigeria’s aviation landscape, enhancing safety, and boosting economic opportunities, the evolution of which is clearly upbeat, visionary, and radically transformative, rapidly changing the aviation sector into a world-class aviation industry through positive change.

Chief Keyamo’s wind of change began at a point where Nigeria’s aviation sector was comatose, plagued by inefficiencies and multifaceted systematic challenges; hence, immediately after assuming office, Chief Keyamo decided on some key reforms, captured under his five-point agenda which focused on advancing safety, infrastructure, support for local operators, human capacity development, and revenue generation.

These also serve as a blueprint for Nigeria’s long-term aviation success. Chief Keyamo’s imperative on modernizing infrastructure, improving safety, and creating opportunities for local airlines is a demonstration of his vision for a thriving aviation industry.

So far, Chief Keyamo’s audacious tenure has set lofty heights in the improvement of safety standards, enhancing the Nigerian Civil Aviation Authority (NCAA) by ensuring strict compliance with international safety protocols, which has led to Nigeria’s recertification by the International Civil Aviation Organisation (ICAO), a testament to the country’s commitment to aviation safety, and a substantial increase in the country’s compliance score with the Cape Town Convention.

In a deliberate measure at soaring up the infrastructural deficits within the sector, Chief Festus embarked upon the rehabilitation of airports and air navigation infrastructure, fast-tracking various projects with desired acceptable qualities, and enhancing passenger experience and operational efficiency.

The improvement and modernisation of Lagos Murtala Muhammed International Airport and other key airports to world standard with state-of-the-art facilities has improved facilities and streamlined processes, reducing congestion and delays, coupled with the modernization of airports, including Lagos Murtala Muhammed International Airport and Abuja’s second runway, enhancing passenger experience and operational efficiency.

Chief Keyamo’s boost of the Local Aviation Industry through efficient utilization of local content development has spurred growth in the domestic aviation industry, while his policies of promoting indigenous carriers and maintenance, repair, and overhaul (MRO) facilities have created jobs and stimulated economic activity, aligning with the Renewed Hope Agenda of the President Tinubu government’s broader agenda of fostering self-reliance and economic diversification.

An enigma, Chief Keyamo’s leadership, which is anchored on a collaborative approach, prioritizing stakeholders’ engagement, and driving innovation, has distinctly positioned Nigeria as a key player in African aviation, enhancing the country’s global reputation with the country being removed from the Aviation Working Group’s (AWG) watchlist of non-compliant countries under the Cape Town Convention.

Through his dogged commitment, he has been able to innovatively secure the Bilateral Air Services Agreements (BASAs), finalizing key elements and opening up new markets for Nigerian airlines while promoting tourism and trade.

His Local Aviation Industry Growth policies have boosted local airlines, with Air Peace launching flights to London Gatwick and securing reciprocal flying rights to Heathrow, while the Aerospace Development programs have promoted partnerships with international organizations in developing aerospace technology and education.

His numerous superlative performances have won him several Awards and Recognitions, including Best Minister of the Year 2024, awarded by The New Telegraph, Minister of the Year, a recognition by The Sun and Daily Independent, and the Super Minister Award, which is an honour bestowed on him by The Street Journal.

Poised to navigate the various challenges, Chief Festus Keyamo SAN has sustained positive efforts and the necessary resilience needed to address the various shortfalls such as high operating costs and security concerns; this is against the backdrop of his pragmatic, proactive, and audacious problem-solving approach, which significantly demonstrates that he is progressively and consistently on the right track, and that the reforms carried out have impacted positively on our airspace.

Achimugu wrote this piece from Kaduna.

EL-Lab Limited advancing excellence with ISO 15189:2022 Accreditation, Marks World Quality Week 2025

EL-LAB Medical Diagnostics and Research Centre, Nigeria’s leading ISO-certified diagnostic centre, today announced its dedication to global quality standards, marking World Quality Week 2025 with the theme “Quality: Think differently” and highlighting its ISO 15189:2022 accreditation.

The centre, which was established in 1998 (27 years ago), has provided advanced medical testing services across Lagos State and continues to contribute significantly to the development of the Nigerian health sector.

Quality: The Silent Foundation of Clinical Decisions

In a statement issued by the company, Mrs. Blessing Nwakobi, Quality Assurance Manager, emphasized that Quality Assurance is the cornerstone of reliable medical diagnosis.

“In healthcare, laboratories are the silent foundation of clinical decisions. Most medical diagnoses rely on accurate laboratory results, thereby making Quality Assurance fundamental to patient safety and clinical excellence,” Mrs. Nwakobi stated

Through the successful transition to the ISO 15189:2022 standard—the highest international benchmark for medical laboratories—EL-LAB demonstrates its unwavering commitment to excellence, impartiality, and safety. This accreditation ensures that the centre’s quality management system is not merely compliant, but a living culture of competence and continual improvement.

The system is strategically built on principles including:

* Patient Centred Services

* Risk-Based Thinking

* Continuous Improvement

·       Staff engagement, Competence and Training

This risk-based approach ensures that all activities which pose a risk to patients are managed proactively, assuring the best possible outcomes across the entire testing process

The robust quality management strategy integrates comprehensive mechanisms to guarantee the integrity of every result. Quality assurance at EL-LAB involves the strict adherence to Standard Operating Procedures (SOPs), vigorous Internal Quality Control (IQC) checks, and mandatory validation via External Quality Assessment (EQA).

These programs ensure that every test result is accurate, reproducible, reliable, and comparable with global benchmarks, reinforcing reliability and building public trust in every report issued by the laboratory.

Addressing the 2025 Quality Week theme, “Quality: Think differently,” EL-LAB’s leadership urged healthcare professionals to challenge traditional quality approaches.

“We believe thinking differently about quality begins with one powerful shift: seeing quality not as an act, but as an attitude”. “Quality is what we do when no one is watching and it shows in how we treat our patients, our colleagues, and our work. The ISO 15189:2022 accreditation is a reminder that quality is not a destination, but a journey of continuous improvement.”

EL-LAB invites all partners, colleagues, and stakeholders in the healthcare ecosystem to join them in thinking differently, noting that the future of diagnostic excellence depends on embracing change today.

About EL-LAB Medical Diagnostics and Research Centre

Established in 1998, EL-LAB Medical Diagnostics and Research Centre is a leading ISO-certified medical laboratory providing advanced, reliable, and comprehensive diagnostic services across Nigeria. Dedicated to clinical excellence and patient safety, EL-LAB leverages state-of-the-art technology and a highly competent workforce to deliver results that form the trusted foundation of patient care.