Business
Tinubu’s subsidy removal, FX reforms, stabilising Nigeria’s economy
The Executive Chairman of the Nigeria Revenue Service (NRS), Zacch Adedeji, has defended President Bola Tinubu’s economic reforms, arguing that the administration deserves commendation rather than criticism for removing fuel subsidy and unifying the foreign exchange market.
Mr Adedeji spoke in an interview on Channels Television’s Sunday Politics.
He said the reforms were necessary because the Tinubu administration inherited an economy burdened by an unsustainable fuel subsidy regime, an opaque foreign exchange market, an underperforming oil sector and a narrow tax base.
According to him, the government’s decision to remove the subsidy was implemented alongside the unification of the foreign exchange market as part of broader efforts to stabilise the economy.
He pointed to several indicators which, he said, showed that the reforms had begun to change the structure of the Nigerian economy.
Mr Adedeji cited the growth in domestic refining capacity, saying it had increased from about 30,000 barrels per day before the reforms to about 700,000 barrels per day.
He also said government revenue had risen significantly, from about N12 trillion to N40 trillion, attributing the increase to improved revenue collection and broader economic reforms.
The NRS chairman said the administration’s objective was not to increase the burden on Nigerians but to create an environment in which businesses could grow and generate greater prosperity.
“We are taxing prosperity, not poverty,” he said, stressing that the government would ultimately collect more revenue when businesses become more profitable.
Mr Adedeji also defended the government’s tax reforms, saying they were designed to broaden the tax base and improve the business environment rather than extract more money from poor Nigerians.
He said about 90 per cent of Value Added Tax (VAT) revenue goes to the states, arguing that the reforms had therefore strengthened the finances of sub-national governments.
The NRS chairman said the government had also taken steps to address structural constraints to economic growth, including electricity supply, education, infrastructure and access to credit.
He cited the Electricity Act as one of the reforms intended to change the structure of the power sector by allowing greater state participation and creating room for investment.
According to him, reliable electricity is essential to industrialisation and reducing the cost of doing business.
Mr Adedeji also defended the administration’s infrastructure spending amid concerns over the pace of budget implementation.
He said there was a difference between budgeting and funding, arguing that the government could not simply release money without considering the strategic allocation of resources to projects with long-term economic benefits.
He cited the Lagos-Calabar Coastal Highway and the Sokoto-Badagry Expressway among major infrastructure projects requiring substantial funding.
He also linked infrastructure spending to employment, saying projects such as the coastal road and airport reconstruction would create jobs and stimulate economic activity.
The NRS chairman said the “government was also supporting agriculture through institutions such as the Bank of Agriculture and the Bank of Industry, to expand mechanised farming and improve production.”
Mr Adedeji acknowledged concerns about the hardship Nigerians had experienced since the reforms began, but argued that the government was focused on consolidating the gains already recorded.
He said the administration’s priority was to maintain economic stability while ensuring that the benefits of the reforms gradually translated into improved household prosperity.
He also rejected the perception that increased government revenue meant the administration was taking more money from poor Nigerians.
Rather, he said, the government’s approach was to expand economic activity and collect more revenue from increased prosperity.
Mr Adedeji defended government expenditure against criticism of public officials’ lifestyles, explaining that government spending also circulates through the private sector.
He used spending on facilities such as conference centres as an example, arguing that government expenditure could generate revenue for private businesses and create employment.
READ ALSO: Why subsidy removal, FX reforms caused unavoidable economic shocks — Oyedele
On youth unemployment, he said the administration was supporting technical and vocational education while encouraging corporate organisations to play a greater role in creating employment opportunities.
He said education remained critical to reducing poverty and improving the economic prospects of young Nigerians.
Mr Adedeji also highlighted the government’s credit programmes as part of efforts to promote economic inclusion, particularly by providing financing for small businesses and individuals.
He said continued support for such programmes would help more Nigerians participate in economic activity.
The NRS chairman said the government’s recent reforms, including the new tax laws, would require time to produce their full impact.
He urged Nigerians to support the consolidation phase of the reforms, saying the government was focused on improving energy security, education, infrastructure and the broader economic environment.
He maintained that the ultimate objective of the reforms was to build an economy capable of generating prosperity without relying on unsustainable government interventions.
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Dangote Refinery will open the order book for its initial public offering to retail investors on 14 September, effectively kickstarting the $1.5 billion public share sale, said to be the continent’s biggest ever, Reuters reported Friday, citing two sources who have close knowledge of the move.
Pricing will commence at any moment now at N525 per share ($0.40), with 4.1 billion shares up for subscription, the report added, noting that the sources spoke on the understanding that their identities will not be disclosed.
The crude processing plant, which holds the distinction of being the world’s largest single-train refinery, will have the latitude to sell 15 per cent of the offer size in addition to the total number of shares up for grabs in the event the transaction is oversubscribed, a source was quoted as saying.
The facility, owned by Africa’s richest man, Aliko Dangote, is ready to double nameplate capacity to 1.4 million barrels per day (bpd).
Financing will be provided by proceeds from both the planned equity sale and a private placement held in July, which raised $2.5 billion from institutional investors and high-net-worth individuals. It was 270 per cent oversubscribed.
Another refinery, the size of the current one at 700,000 bpd, is to be established in the coastal town of Lamu in Kenya, strategically conceived by the Dangote Group as the gateway to the broader East African market.
READ ALSO: Dangote Cement sets date for London capital markets day ahead of LSE listing
Last month, the group offered a 30 per cent stake in the proposed refinery to countries in the region, including Kenya, Rwanda and Ethiopia.
The groundbreaking is scheduled for this month.
Dangote Refinery is exploring a cross-border listing on the Johannesburg Stock Exchange, the continent’s foremost bourse, following a primary listing in Lagos.
The corporation said in August that a London listing, which its sister company, Dangote Cement, is actively pursuing, is not on the cards, adding that a potential listing in the UK capital is at least three years away.
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President Bola Tinubu has welcomed the planned launch of the African Credit Rating Agency (AfCRA), saying Africa needs financial institutions that better understand the continent’s economies and risks.
The African Union has announced that the agency will officially launch on 7 October in Port Louis, Mauritius.
President Tinubu said the development was another step towards building African financial institutions capable of providing more accurate assessments of the continent’s economies.
The president disclosed this in a post on his official X account on Thursday, recalling that he had advocated for an African credit rating agency in a February 2026 Financial Times article.
He said he also raised the issue at the Africa CEO Forum in Kigali, Rwanda, in May, where he called for Africa to develop financial institutions that understand its economic realities.
“Africa is not asking for favourable ratings. We are asking for fair ratings, grounded in our fundamentals and in the reforms our economies are actually carrying out,” he said.
Why the agency matters
Credit ratings influence how investors assess the risk of lending to countries and companies. They can also affect borrowing costs and the amount of capital available to governments and businesses.
African governments have repeatedly raised concerns about what they describe as an “Africa premium”, under which African countries may face higher borrowing costs because of how investors perceive the continent’s risks.
The three major global rating agencies, including Fitch, Moody’s and S&P Global Ratings, currently play a major role in assessing African sovereign and corporate borrowers.
President Tinubu, in an article published by Financial Times, argued that African economies were paying too much to borrow because international assessments did not always adequately capture their economic realities.
He cited a 2023 United Nations Development Programme estimate that shortcomings in credit ratings cost African countries about $75 billion annually through higher interest payments and foregone lending.
He also argued that commodity-dependent African economies could be particularly exposed to downgrades during global market downturns, even when their reserves, fiscal positions, and debt profiles remained manageable.
The proposed agency is therefore expected to provide an Africa-focused alternative by taking greater account of local economic conditions and reforms.
The African Union has said that AfCRA will operate alongside existing global rating agencies rather than replace them.
Tinubu seeks investor confidence
In his statement Thursday, the president said the establishment of an African rating agency should not be interpreted as a demand for preferential treatment.
READ ALOS: US court case on Tinubu’s past forfeiture is civil, not criminal matter – Presidency
Rather, he said, the agency must provide assessments based on economic fundamentals and the reforms being implemented by African countries.
He pointed to Nigeria’s experience, arguing that improvements in economic data, fiscal transparency and reforms had contributed to recent upgrades by international rating agencies.
However, he acknowledged that the credibility of AfCRA would ultimately depend on the quality and independence of its assessments.
“AfCRA must now earn the confidence of global capital. That confidence will rest on its independence and the rigour of its work,” he noted.
The launch is scheduled for 7 October in Mauritius, with President Tinubu saying he looks forward to the development.
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