Zacch Adedeji, the Executive Chairman of the Federal Inland Revenue Service (FIRS), has articulated a robust defense of the Nigerian Federal Government’s ongoing borrowing strategy, framing it as an essential and deliberate element of the nation’s economic policy rather than a sign of fiscal weakness.
During a press briefing held at the State House on Tuesday, organised by the Presidential Communications Team, Adedeji revealed that federal revenue collections experienced a remarkable surge, reaching ₦3.64 trillion in September 2025. This figure marks an impressive 411% increase compared to the ₦711 billion collected in May 2023.
“Borrowing should not be viewed negatively,” Adedeji emphasized. “A government’s budget is composed of expenditures, revenues, and loans. When the National Assembly approves borrowing within the budget framework, it becomes an integral part of our fiscal approach. No economy, nor individual, can rely solely on revenue streams.”
His comments come amid heightened public debate over Nigeria’s debt levels, especially following President Bola Tinubu’s July appeal for a $21.5 billion external loan package. This request included a $2 billion foreign currency bond and a ₦757.98 billion domestic bond aimed at addressing pension obligations. Notably, this loan application was submitted shortly before the President announced that Nigeria had already surpassed its 2025 revenue goals ahead of schedule and intended to lessen its borrowing dependence.
Adedeji explained that borrowing enables governments to fund long-term infrastructure projects without overburdening current taxpayers. He introduced the “Matchy Concept” of financing, which advocates that projects yielding benefits for future generations-such as highways and essential infrastructure-should be partially funded through borrowing. This approach ensures that future beneficiaries contribute their fair share through taxes.
Furthermore, he highlighted the pivotal role government borrowing plays in maintaining the health of the financial sector. By supporting banks, which generate profits, pay wages, and contribute taxes, borrowing sustains a vital economic cycle. “Banks are integral to the economic system. Government borrowing helps keep them operational, and the taxes they pay ultimately return to government revenue,” he noted.
Adedeji dismissed detractors, labeling them “container economists” who, in his view, rely on shallow social media commentary rather than engaging with the complex economic rationale behind borrowing.
On the topic of revenue growth, Adedeji pointed to substantial gains across various revenue streams. Non-oil revenues soared to ₦1.06 trillion from ₦151 billion in May 2023, while oil revenues increased to ₦644 billion. Collections from Value Added Tax (VAT) more than tripled, reaching ₦723 billion.
He credited these improvements to tax reforms that streamlined processes, eased burdens on small enterprises, and rationalized incentives. Current initiatives include the rollout of a new fiscal policy framework, updated excise tax regulations, and the implementation of e-invoicing systems to boost compliance.
Additionally, Adedeji revealed plans to harmonize state-level levies, introduce a presumptive tax system targeting hard-to-tax sectors, and lower corporate tax rates. These measures form part of a comprehensive fiscal and constitutional reform agenda designed to improve efficiency and fairness in the tax system.
