From Juliana Taiwo-Obalonye, Abuja
Nigeria’s federal government has seen a remarkable surge in revenue collection, growing by 411% over 16 months to ₦3.64 trillion as of September 2025, but borrowing remains an essential tool—now focused strictly on funding growth and infrastructure, rather than recurrent expenses, the Chairman, Federal Inland Revenue Service (FIRS), Zacch Adedeji has said.
He disclosed the strong revenue performance on Tuesday, September 23, during the press briefing organised by the presidential media team, at the State House, Abuja.
He revealed that revenues soared from ₦711 billion in May 2023 to ₦3.64 trillion in September 2025. Non-oil tax collections experienced the sharpest rise, increasing from ₦151 billion to over ₦1 trillion during that period. Oil revenue also climbed considerably, with receipts rising from ₦96 billion to ₦644 billion.
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Value Added Tax (VAT) receipts more than tripled to ₦723 billion from ₦218 billion, while customs revenue surged to ₦322 billion from ₦106 billion.
The Nigerian Upstream Petroleum Regulatory Commission, he said, also reported remittances jumping to ₦745 billion from ₦125 billion, and the Nigerian National Petroleum Company contributed ₦111 billion in September 2025.
Adedeji attributed this revenue boom to tax reforms initiated under President Bola Tinubu’s administration. Measures such as streamlining tax systems, reducing burdens on SMEs, harmonising levies, and deploying new technology platforms, like e-invoicing and data-driven audits, have closed tax leakages and expanded the tax base.
Responding to a question on why Nigeria continues to borrow despite hitting lofty revenue targets, he said the strategy has shifted dramatically. He stressed that borrowing is no longer to cover salaries or subsidies but is directed at financing infrastructure and productive investments to spur long-term economic growth.
Adedeji explained that “Borrowing is not a problem, banks are part of our economy eco-system there is no country or an individual in the world that survive based on its own income, when government borrows from bank we pay interest, it is from that interest they their salary, it is from the salary that they pay taxes to state government, it is from the profit difference between profit and lending that I collect taxes from. So when you say you go for lending…it means you go for sustainability.
“So you borrow to beat higher cost for the future, you borrow because if matching concept to sustain continuity..when you borrow to do road infrastructure and you collect in the future taxes from anybody using that road to pay their fair share.
“Borrowing is part of economic plan and any country that will grow has to borrow because it is part of eco-system of a viable nation.
“So when Mr. President said we have met our target or we are doing well in revenue, and they say why are we borrowing, is borrowing not part of the budget we submitted to National Assembly? Are we borrowing outside what is approved?”
President Tinubu, who has consistently pushed for fiscal discipline, declared in his 2025 mid-year economic briefing that domestic resource mobilisation is paramount. “Our goal is to fund development from internally generated revenues,” he said, “and borrow only to support investments that can pay for themselves.”
Adedeji continuing added: “If I have revenue of 80 and I borrow 20 as planned, then I have met my expenditure target of 100. So, borrowing within the approved budgetary limits is normal and necessary to meet the fiscal needs. The problem arises when borrowing is excessive or unplanned, causing debt distress or macroeconomic instability.
Also, borrowing is not wrong as long as it is sustainable and used for productive sectors that generate economic growth, which in turn enhances revenue generation to repay the loans.
Therefore, the approach of stopping printing money—ending monetization of deficits—helps in controlling inflation and exchange rate pressures. It shows fiscal discipline by relying on actual revenue collection and planned borrowing. This deliberate effort supports macroeconomic stability and fosters investor confidence in the economy.
In summary, borrowing as a component of the budget is legitimate, provided it aligns with fiscal plans, is transparently managed, and repayment commitments are respected.”
Adedeji said that the government is also actively settling inherited debts to stabilise Nigeria’s fiscal position, including obligations related to the Central Bank’s overdraft facilities, strengthening investor confidence in the country’s finances.
On future projects, Adedeji said FIRS plans further reforms aimed at enhancing fiscal efficiency and competitiveness. These include harmonising subnational levies to reduce multiple taxation, introducing a presumptive tax system for informal sectors, and progressively lowering corporate tax rates to attract investment.
Additionally, he said constitutional reforms are being pursued to clarify revenue allocation between federal and state governments under strengthened fiscal federalism.
The post Why borrowing continues despite Nigeria’s 411% revenue growth – Adedeji appeared first on The Sun Nigeria.
