As Nigeria grapples with the dual challenge of economic recovery and fiscal sustainability, the Federal Ministry of Finance emerged as a standout performer under President Bola Tinubu’s Renewed Hope Agenda, posting record-breaking achievements and enacting reforms that are reshaping the nation’s revenue architecture.
From unprecedented tax collections to critical reforms in customs operations and debt management, the Ministry’s 2024 mid-term report, compiled by the Office of the Special Adviser to the President on Policy & Coordination, reveals a finance sector on a transformation trajectory.
It credits much of this progress to deliberate policies targeting fiscal discipline, digital innovation, and private sector synergy.
“Exceptional non-oil revenue performance” was a recurring phrase in the report, and with good reason. The Federal Inland Revenue Service (FIRS) shattered previous records, collecting N21.66 trillion in 2024 alone, 111.6% of its revenue target. More impressively, non-oil taxes exceeded projections by 28% and now make up a commanding 73.4% of total revenues.
“This reflects a determined push to reduce reliance on oil and broaden our tax base through efficiency, technology, and reform,” the report states.
Similarly, independent revenue generated by Ministries, Departments, and Agencies (MDAs) reached N4.146 trillion, representing 155% of the target. The Nigeria Customs Service (NCS) was another top performer, raking in an all-time high of N6.1 trillion, a 90.4% increase over its 2023 figure.
“In October 2024, the Service achieved the highest monthly revenue collection ever at ₦603.17 billion,” the report notes. Even more remarkable, these revenues were achieved despite N1.68 trillion in concessions granted to stimulate economic growth, indicating improved oversight and operational efficiency.
A key enabler of these gains was the ongoing digital transformation. The NCS began pilot testing of an indigenous customs clearance platform, ‘B’Odogwu,’ as part of its Trade Modernisation Project. Within its first deployment at the PTML Command, transactions worth N31 billion were processed.
Beyond revenue collection, the Ministry’s fiscal strategy aimed to strike a delicate balance between growth and sustainability.
A notable success was the implementation of the Debt Management Strategy, which kept Nigeria’s debt-to-GDP ratio at 55%, below the 60% fiscal anchor and within World Bank and IMF limits. Debt service-to-revenue ratio stood at 60.55%, comfortably below the 75% threshold set for 2024.
“Our debt ratios are not just within safe boundaries; they reflect our commitment to responsible borrowing and sustainable financing,” the report reads.
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The Renewed Hope Action Plan, the administration’s policy document, also promised to incentivise productivity in critical sectors. In 2024 alone, N369 billion in tax waivers were granted to 457 companies across agriculture, solid minerals, and manufacturing, the mid-term report stated.
“These waivers were not handouts, but strategic tools to fuel inclusive economic growth and domestic capacity building,” it added.
Also, the Project Lighthouse Programme, a joint initiative with the FIRS, recovered N56 billion in aggregated debts owed to the Federation, while the Nigerian Export-Import Bank (NEXIM), in collaboration with international partners, secured an additional $40 million to finance export-driven businesses.
Tinubu had pledged to optimise government revenue and reduce inefficiency. The Ministry’s report affirms this direction, highlighting efforts to cap fiscal expenditures.
With a renewed focus on stakeholder engagement and transparency, quarterly sessions are being introduced to improve accountability and citizen participation.
“Initiating and implementing quarterly citizens and stakeholder engagement sessions is a cornerstone of the Ministry’s renewed contract with the people,” it stated.
As the administration heads into the second half of its term, the Ministry of Finance is positioning itself not just as a revenue collector, but as a strategic partner in national development. If current momentum holds, Nigeria may not just weather its economic storms, it may very well redefine its financial future.
Tax Reform
One of the major challenges that Nigerian President Bola Tinubu took upon himself upon assuming office was to reform the country’s tax system. With more than 60 applicable taxes in the country, navigating them is often the investor’s nightmare.
Tinubu’s aim was to pare down their number to single digits. This would make the taxes simpler to understand and easier to pay. With improved ease of doing business, more companies would be expected to open up, growing tax revenue in the long run.
The bold tax reforms aim to overhaul the country’s tax collection and administration systems, presenting an opportunity to create a more equitable and efficient taxation model.
The reforms would be revisions to the Value Added Tax (VAT) revenue-sharing formula and exemptions for small businesses and the average Nigerians.
There are high hopes by the administration and Nigerians that the changes would revitalize Nigeria’s economy and expose critical issues within the country’s federal structure, particularly the economic imbalances among regions (States and Local Governments).
Despite the initial objection to the exercise, the tax reform is fully in progress and implementation has seen significant gains in the economy within the last few months.
Although opinions have been divided on the progress of the tax reform and its necessity; while some argue they are a blessing, improving government revenue and addressing inequality, others point to potential negative impacts like increased tax burdens and stifled business growth.
Speaking on the impact of the tax reform as the administration marks two years in office, President Tinubu said the bold tax reform agenda is already yielding results.
He said by the end of 2024, the country’s tax-to-GDP ratio rose from 10 percent to over 13.5 percent, a remarkable leap in just one year.
The President noted that it was a result of deliberate improvement in tax administration and policies designed to make the tax system fairer, more efficient and more growth-oriented.
“We are eliminating the burden of multiple taxation, making it easier for small businesses to grow and join the formal economy.
The tax reforms will protect low-income households and support workers by expanding their disposable income.
“Essential goods and services such as food, education, and healthcare will now attract 0 per cent VAT. Rent, public transportation, and renewable energy will be fully exempted from VAT to reduce household costs further.
“We are ending the era of wasteful and opaque tax waivers. Instead, we have introduced targeted and transparent incentives supporting high-impact manufacturing, technology, and agriculture sectors,” said Tinubu.
He added that these reforms were not just about revenue but about stimulating inclusive economic growth.
He said, there was a deliberate focus on youth, who a friendlier tax environment for digital jobs and remote work would empower.
Speaking on the tax reform, Sunny Onuesoke, a chieftain of the People’s Democratic Party (PDP) and former Delta State gubernatorial aspirant, noted that it represents a transformative opportunity for the rejuvenation of Small Medium Enterprises (SMEs), and the enhancement of the fortunes of Nigerian workers.
Onuesoke disclosed that by eliminating the scourge of double taxation imposed by state governors, the reforms would pave the way for an equitable business climate that significantly elevates both local and foreign investment potentials.
He said if implemented well, the tax reform would harmonise and simplify tax administration and streamline its operations and enforcement, generate and safeguard more revenue for the country and the states.
