For most of Nigeria’s Fourth Republic, the national budget has been a crude oil receipt in disguise. When prices rose, optimism followed. When they fell, austerity followed. President Bola Ahmed Tinubu, three years into office, has tried to break that cycle.
The departure is deliberate. Rather than wait for another oil boom to bail out the treasury, his administration chose to rebuild the plumbing of public finance: tax administration, digital collection, and a non-oil base wide enough to stand on even when barrels wobble.
It was never going to be popular. Subsidies had hidden inefficiency. Multiple exchange rates had hidden arbitrage. But both also hid something more dangerous: a state that could not fund itself without borrowing or praying for $100 oil.
The first signal came with the removal of the petroleum subsidy in May 2023. The fiscal savings were immediate and massive. Federation revenues jumped from ₦16.8 trillion to ₦31.9 trillion between 2023 and 2024, money that previously went to keeping petrol artificially cheap.
That windfall did not go to consumption. It went, in design, to widening fiscal space. States and LGAs received ₦6.16 trillion in 2023 and ₦15.26 trillion in 2024, a direct result of subsidy withdrawal. For the first time in years, subnational governments had cash to fix roads, schools, and hospitals without waiting for FAAC to feel generous.
But revenue without reform is just luck. The Tinubu team paired the windfall with a push to change how Nigeria collects money. The goal was simple: tax the economy we have, not just the oil we pump.
Better tax administration became the centerpiece. The Federal Inland Revenue Service and state revenue agencies were nudged toward digital systems, data matching, and compliance drives. The idea was to move from manual assessments and leakages to a system where a POS transaction, a company filing, or a property record could be seen by the treasury.
Digital revenue systems matter because Nigeria’s economy is mostly informal, fast, and mobile. Cash is dying. If government cannot see digital flows, it cannot tax them fairly. The reforms aimed to plug that blind spot.
The result, according to World Bank and IMF assessments, has been measurable. The fiscal deficit narrowed from 5.4 percent of GDP in 2023 to approximately 3 percent in 2024. Debt-service pressure eased as revenue grew faster than borrowing.
More importantly, the tax-to-GDP ratio began to climb. For decades Nigeria hovered around 6 to 8 percent, one of the lowest in the world. The new push — expanding VAT compliance, tightening corporate tax collection, and bringing high-net-worth individuals into the net — was meant to move that needle.
This is where the “expanded non-oil tax base” comes in. Oil still matters, but it can no longer carry the whole budget. The administration prioritized telecommunications, financial services, manufacturing, and trade for broader compliance.
Digital platforms became both target and tool. Fintechs, e-commerce firms, and even content creators were brought into the tax conversation. The logic: if you earn in naira, you should contribute in naira, whether your office is on Broad Street or on Instagram.
Critics called it overreach. Supporters called it overdue. The truth is somewhere in between. No economy grows sustainably when only oil companies and big banks pay taxes while millions of profitable businesses stay off the books.
The reforms also targeted leakages. In a Democracy Day address, Tinubu noted that three years ago public finances were under severe strain and investment was discouraged. His administration chose to act decisively to restore stability and fiscal discipline.
That discipline showed in external balances. FX reserves rose to over $38 billion and net external reserves climbed to over $34 billion by end of 2025. A $7 billion FX backlog inherited in 2023 was cleared. Investors, long wary of opaque fiscal management, began to return.
Growth followed, albeit unevenly. GDP rose from 2.74 percent in 2023 to 3.87 percent in 2025, with 2024 marking the fastest growth in nearly a decade. It is not yet job-rich growth, but it is growth not entirely dependent on oil prices.
The social contract of these reforms is still being negotiated. Households felt the pain first — higher transport, higher food, higher power bills. The promise is that the gains will be recycled into infrastructure, education, and health. The 2,700 km of roads under construction and the NELFUND student loan disbursements are early tests of that promise.
What makes this moment different from past reform cycles is intent. Previous governments tinkered at the edges. Tinubu’s team went for structural issues that many predecessors dodged. Fuel subsidy gone. FX windows unified. Revenue reforms pushed.
The risk now is implementation. Digital systems fail without data. Tax expansion fails without trust. And trust fails when people do not see roads, power, or jobs. Revenue reform cannot be an end in itself. It must buy better services.
Nigeria is still an oil country. But for the first time in a long time, it is budgeting like it might not always be. That shift — from crude to cash, from dependence to administration, from luck to systems — is Tinubu’s most aggressive fiscal gamble. If it holds, the next budget will be written not by the price of Brent, but by the productivity of Nigerians.
Rt Hon
CHINEDUM ENYINNAYA ORJI
APC federal house of representative candidate for Ikwuano/umuahia constituency
writes from Amaokwe Ugba Ibeku, Abia State.
