When Wale Edun, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, urged West African countries to stop depending on external assistance and instead reform their economies, he was issuing more than a polite suggestion, he was sounding an alarm.
At the 11th Annual Conference of the West Africa Association of Public Accounts Committees (WAAPAC) in Abuja, Edun argued that dwindling global support, shrinking fiscal space, and rising debt costs leave Africa with only one viable path forward: internal reforms, domestic revenue growth, and private-sector-led investment.
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Recent figures from Nigeria’s own fiscal position underscore just how urgent this message has become. As of the first quarter of 2025, Nigeria’s total public debt had surged to ₦149.39 trillion (US$97 billion), up sharply from ₦121.7 trillion just a year earlier. Domestic borrowing accounts for 53 percent and external borrowing 47 percent of this figure, revealing a highly leveraged fiscal profile. Even more troubling, Nigeria’s debt-to-GDP ratio now stands at roughly 52 percent, well above the statutory ceiling of 40 percent set by law.
This breach of the country’s own debt limit is a red flag for fiscal sustainability and calls for more rigorous oversight, transparent borrowing, and measurable economic returns on every naira borrowed.
Global Winds Have Shifted
Edun’s warning must be viewed within a global context that is increasingly hostile to the old development model.
Trade wars and protective tariffs have stripped an estimated $2 trillion worth of world trade from circulation, while developed nations are redirecting resources into domestic subsidies rather than global cooperation. As Edun bluntly observed, developing nations are now “putting back more than they are getting” in terms of concessional financing.
In practical terms, this means Africa cannot wait for aid inflows or cheap multilateral loans to drive growth. The external cushion is gone, and relying on it further would only deepen the region’s vulnerability.
The Case for Domestic Reform
The scale of Nigeria’s debt problem illustrates why Edun’s emphasis on fiscal reform is not optional but existential. High debt servicing obligations are already crowding out spending on infrastructure, healthcare, and education.
The minister’s insistence that borrowing must be tied to projects with measurable returns is therefore a necessary corrective to decades of politically motivated, low-impact debt accumulation.
Central to this reform agenda is domestic revenue mobilisation. Nigeria’s tax-to-GDP ratio remains among the lowest in the world, and Edun has argued for the use of automation, digitisation, and even artificial intelligence to improve compliance and broaden the tax base. Combined with debt transparency and coordinated debt treatment, these measures could put Nigeria, and by extension, West Africa, back on a sustainable growth path.
Unlocking Opportunity Through Reform
While Edun’s message is sobering, it is not pessimistic. He points to the Tinubu administration’s tough decisions—fuel subsidy removal, exchange rate unification, and the passage of a comprehensive tax law—as laying the foundation for economic recovery. The goal is not just macroeconomic stability but inclusive growth that delivers quality jobs, particularly for young people.
By next year, the finance minister projects that Nigeria will achieve 1.2 million barrels per day in domestic refining capacity, ending the costly cycle of exporting crude only to import refined products.
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More importantly, exchange rate adjustments are making Nigerian manufacturing more competitive, opening a pathway to industrial growth and job creation. “Products made in Nigeria, whether by small, medium, or large manufacturers, are now competitive,” Edun noted, framing this as a moment to seize opportunities rather than retreat.
Philip Ibitoye is a Special Correspondent with EKO HOT BLOG. Click here to find daily analysis and critical insight on trending issues in Lagos and other parts of Nigeria.
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