Nigeria must cut dependence on debt – Edun

Edun spoke on Tuesday at the management retreat of the Nigerian Revenue Service in Abuja, where he warned that the global financial environment had become increasingly hostile to developing economies, making debt-driven financing more costly and less viable.

“And of course, we need to reduce our dependence on debt. And so, revenue mobilisation within this context is a developmental imperative,” Edun said.

He said the world was retreating from multilateral cooperation, with countries prioritising domestic interests and scaling back cross-border financial support.

According to him, this shift had left poorer and developing countries facing an unfavourable balance between what they receive from abroad and what they pay out in debt service.

Edun said available data for 2024 showed that developing countries paid about $163bn in debt service, compared with $42bn in overseas development assistance and $97bn in foreign direct investment, underlining the extent to which external funding flows had turned negative.

He said this reality meant Nigeria had to anchor its fiscal sustainability on its own revenue-generating capacity, rather than continuing to rely on borrowing in an era of high global interest rates and tighter financial conditions.

“The primary anchor of our fiscal sustainability… is going to be our own fiscal efforts, our own ability to generate savings, which then can be used for investment,” Edun said. “And before you can generate savings, you have to have the revenue.”

The minister linked Nigeria’s rising debt pressures to a series of global shocks, including the COVID-19 pandemic, geopolitical conflicts and trade tensions, which have forced many developing countries to borrow more while paying higher debt service.

He said these pressures had squeezed fiscal space and made it more difficult for governments to fund essential services, further reinforcing the need for sustainable domestic revenue.

“That is why it is critical at this time that we move to an era of sustainable revenues so that we can invest meaningfully in infrastructure, strengthen education and healthcare, and help the poorest and the most vulnerable,” Edun said.

Edun’s call for Nigeria to rein in borrowing comes amid remarks by the Senate indicating that fresh loans remain inevitable to plug the country’s large budget deficit.

At a public hearing on the 2026 Appropriation Bill, the Chairman of the Senate Committee on Appropriations, Olamilekan Adeola, said continued borrowing had become unavoidable, given weak revenue inflows and Nigeria’s large infrastructure and development gaps.

Adeola said that despite sustained public opposition to new loans, the scale of the country’s funding needs left the government with limited alternatives, arguing that the central concern should not be borrowing itself, but the structure and sustainability of deficit financing.