Nigeria’s government plans to boost revenues by 60% to maintain sustainable debt levels and alleviate widespread hardship.

Finance Minister Wale Edun, speaking at the 2024 IMF/World Bank Spring Meetings in Washington D.C., said the number was “very much a stretch target” but one that Africa’s biggest economy needs to reduce its fiscal deficit from around 6.1% of GDP to 3.8%.

Nigeria’s government is aiming to boost oil production to two million barrels per day, following a drop from 1.69 million bpd in 2023 to 1.47 million bpd.

Edun emphasized increasing oil production as the lowest-hanging fruit for revenue growth, aiming for two million bpd, including condensates from natural gas.

Nigeria, Africa’s largest crude oil producer, faces challenges in foreign exchange generation due to theft and pipeline sabotage, but has made progress in addressing these issues.

Nigeria’s government is utilizing digital technology to enhance tax collection efficiency and boost revenues by imposing more fees and charges.

President Tinubu’s reforms, including suspending petrol subsidy and devaluing naira currency, have led to price increases, particularly in food and transportation, reaching 33.2% as of March.

The government has responded to the “costly and painful” impact of the reforms by implementing direct cash transfers to the poorest and most vulnerable, leveraging COVID-19 lessons, while also aiming to increase revenues through digital technology and foreign investment.

Nigerian President Tinubu has visited Europe, Asia, and the Middle East to attract investors, but no significant investment commitments have been made. “We haven’t seen any headline-making investment commitments but there is a lot of interest from foreign direct investors,” Edun said.

Nigeria’s debt stock reached $108.2 billion at the end of 2023, with 90% of the government’s budget spent on debt financing. Debt will continue as a source of development financing, with revenue serving as the answer. “The answer to debt is revenue. Look at the U.S.’s debt figures but the difference is that they have the revenue — taxes and other government income — to service it,” he said. “That’s what lenders want.”

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