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Nigeria must cut dependence on debt – Wale Edun

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The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has said Nigeria must reduce its dependence on borrowing and build a stronger, more reliable domestic revenue base if it is to stabilise its finances and fund development sustainably.

Edun spoke on Tuesday at the management retreat of the Nigerian Revenue Service in Abuja, where he warned that the global financial environment had become increasingly hostile to developing economies, making debt-driven financing more costly and less viable.

“And of course, we need to reduce our dependence on debt. And so, revenue mobilisation within this context is a developmental imperative,” Edun said.

He said the world was retreating from multilateral cooperation, with countries prioritising domestic interests and scaling back cross-border financial support.

According to him, this shift had left poorer and developing countries facing an unfavourable balance between what they receive from abroad and what they pay out in debt service.

Edun said available data for 2024 showed that developing countries paid about $163bn in debt service, compared with $42bn in overseas development assistance and $97bn in foreign direct investment, underlining the extent to which external funding flows had turned negative.

He said this reality meant Nigeria had to anchor its fiscal sustainability on its own revenue-generating capacity, rather than continuing to rely on borrowing in an era of high global interest rates and tighter financial conditions.

“The primary anchor of our fiscal sustainability… is going to be our own fiscal efforts, our own ability to generate savings, which then can be used for investment,” Edun said. “And before you can generate savings, you have to have the revenue.”

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The minister linked Nigeria’s rising debt pressures to a series of global shocks, including the COVID-19 pandemic, geopolitical conflicts and trade tensions, which have forced many developing countries to borrow more while paying higher debt service.

He said these pressures had squeezed fiscal space and made it more difficult for governments to fund essential services, further reinforcing the need for sustainable domestic revenue.

“That is why it is critical at this time that we move to an era of sustainable revenues so that we can invest meaningfully in infrastructure, strengthen education and healthcare, and help the poorest and the most vulnerable,” Edun said.

Edun’s call for Nigeria to rein in borrowing comes amid remarks by the Senate indicating that fresh loans remain inevitable to plug the country’s large budget deficit.

At a public hearing on the 2026 Appropriation Bill, the Chairman of the Senate Committee on Appropriations, Olamilekan Adeola, said continued borrowing had become unavoidable, given weak revenue inflows and Nigeria’s large infrastructure and development gaps.

Adeola said that despite sustained public opposition to new loans, the scale of the country’s funding needs left the government with limited alternatives, arguing that the central concern should not be borrowing itself, but the structure and sustainability of deficit financing.

“Nigeria cannot help but keep borrowing because revenue inflows are unpredictable and development needs are enormous. What matters is how we borrow and how we fund our deficits,’’ Adeola said.

Edun further described Nigeria’s tax reforms as a central pillar of this shift away from debt, saying they were designed to improve fairness, equity and efficiency in the system while increasing resources available for social and capital spending.

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However, Edun stressed that policy reforms alone would not be sufficient without strong execution and improved compliance, noting that enforcement by itself could not deliver lasting results.

“No fiscal reform can deliver results if compliance is weak or uneven,” he said. “Yet compliance cannot be achieved through enforcement alone. It is carrot and stick.”

According to him, trust in the tax system was essential to improving compliance and reducing reliance on debt, as citizens needed to understand their obligations, see fairness in administration and observe tangible benefits from their contributions.

“People must see the benefits of their contributions in infrastructure and in services,” he said, adding that revenue reform was both a technical and governance challenge.

Edun said the Nigerian Revenue Service sat at the centre of the fiscal reform agenda and would play an indispensable role in translating policy intent into real-world outcomes.

He said the success of the reforms should ultimately be measured by higher, more predictable revenues, reduced fiscal vulnerability, and stronger public service delivery.

“The connection between macroeconomic conditions and revenue performance is direct and unavoidable,” he said. “Economic growth expands the tax base. Exchange rate dynamics affect customs revenue. Inflation influences compliance behaviour and affects the real value of collections.”

He warned that Nigeria must build a revenue system that was resilient to volatility and less cyclical, rather than one that rises sharply when oil prices are high and weakens when prices fall.

Speaking earlier, the Executive Chairman of the Nigerian Revenue Service, Zacch Adedeji, said the establishment of the NRS marked a decisive break from the past and placed a heavy responsibility on the new institution to deliver on Nigeria’s fiscal reform objectives.

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Adedeji said the transition represented a new era that demanded a different approach to leadership, accountability and execution, warning that legacy habits and assumptions could undermine reform if left unchallenged.

He said leadership, rather than structure or technology alone, would determine whether the new institution succeeded, stressing that internal beliefs and behaviours often shaped outcomes more than formal strategies.

“What brought us here will not be sufficient for where we are going,” Adedeji said, urging senior managers to examine how their leadership styles, assumptions and decision-making processes could either unlock or constrain performance.

He said the credibility of Nigeria’s revenue architecture and confidence in the wider economy now rested on the NRS’s ability to deliver results with integrity, discipline and clarity of purpose.

According to Adedeji, the service would not be judged by speeches or reform documents, but by measurable outcomes that strengthened public trust and supported national development.

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DisCos earn N603bn as power offtake drops

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Electricity distribution companies collected N603.64bn from customers in the second quarter of 2026, despite a decline in the volume of electricity they received from the power market.

The figure was contained in the Nigerian Electricity Regulatory Commission’s second-quarter 2026 report, which showed that the average energy offtake by the DisCos at their trading points fell to 3,197.03 megawatt-hours per hour in the quarter.

The Q2 figure represented a 112.45MWh/h, or 3.40 per cent, decline from the 3,309.48MWh/h average recorded in the first quarter. Despite the decline in offtake, the DisCos recorded an overall offtake performance of 94.07 per cent during the quarter, against available partially contracted capacity of 3,398.41MWh/h.

According to the report, the DisCos received a total of 6,982.32 gigawatt-hours of electricity during the quarter but billed customers for only 5,812.31GWh. It stated, “This translates to an overall energy accounting efficiency of 83.24 per cent and represents a 0.24pp decrease compared to 2026/Q1 (83.48 per cent).”

The report further revealed that the naira value of electricity off-taken by the DisCos stood at N946.57bn, while the total value of energy billed to customers was N744.67bn.

This translated to a billing efficiency of 78.67 per cent, representing a decline of 0.57 percentage points from the 79.24 per cent recorded in the first quarter. At the collection stage, the DisCos recovered N603.64bn from the N744.67bn billed to customers, translating to a collection efficiency of 81.06 per cent.

The report said this represented an improvement of 2.11 percentage points from the 78.95 per cent recorded in Q1. However, the difference between the amount billed and the amount collected stood at N141.03bn during the quarter.

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The report also disclosed that the weighted average Aggregate Technical, Commercial and Collection losses across the 11 DisCos stood at 36.23 per cent in Q2.

It stated, “The ATC&C loss of 36.23 per cent is 19.31pp higher than the 2026 MYTO target (16.92 per cent) and translates to a cumulative revenue loss of N129.07 billion across all DisCos.”

The 36.23 per cent loss, however, represented a 1.21 percentage-point improvement from the 37.44 per cent recorded in Q1.

The report noted that all the DisCos failed to meet their ATC&C targets during the quarter, with “Kaduna DisCo recording the worst underperformance relative to the target (Actual – 67.70 per cent vs target – 18.18 per cent),” it stated.

On market obligations, the report said the cumulative upstream invoice payable by the DisCos stood at N410.38bn in Q2.

The amount comprised N326.46bn for generation costs from the Nigerian Bulk Electricity Trading Company and N83.92bn for transmission and administrative services provided by the market operator.

The DisCos collectively remitted N385.44bn, comprising N306.62bn to NBET and N78.82bn to the market operator, leaving an outstanding balance of N24.94bn. This represented a market remittance performance of 93.92 per cent, slightly lower than the 94.08 per cent recorded in Q1.

The report added that the Federal Government had taken responsibility for about 50 per cent, or N321.26bn, of the total generation costs through subsidies arising from the freezing of end-use customer tariffs at the rates applicable in July 2024.

Meanwhile, three international bilateral customers purchasing electricity from grid-connected generating companies paid $8.67m against an $18.84m invoice issued by the market operator during the quarter.

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This represented a remittance rate of 46.02 per cent. Domestic bilateral customers, on the other hand, paid N6.91bn against an invoice of N7.55bn, representing a remittance rate of 91.54 per cent.

Source: punchng.com

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Personal loans rise to N2tn as Nigerians borrow more

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Personal loans obtained by Nigerians rose to an estimated N2.06tn in May 2026, as consumer credit continued to expand amid persistent cost pressures and weak consumer spending, according to the latest Economic Report of the Central Bank of Nigeria.

The figure, calculated from data contained in the CBN’s May 2026 Economic Report, represents about 64.78 per cent of the N3.18tn total consumer credit outstanding during the month. The report covers developments in the real, fiscal, financial and external sectors of the economy.

The apex bank said consumer credit increased by 1.60 per cent from N3.13tn in April to N3.18tn in May, indicating that Nigerians borrowed an additional N50bn within one month.

It said, “Consumer credit outstanding increased by 1.60 per cent to N3.18tn from N3.13tn in the preceding month, driven by growth in personal and retail loans, which rose by 1.98 and 0.90 per cent, respectively.”

The CBN added, “Personal loans remained the dominant component of consumer credit, accounting for 64.78 per cent, while retail loans constituted 35.22 per cent.”

Based on the proportions reported by the apex bank, personal loans stood at approximately N2.06tn at the end of May, while retail loans amounted to about N1.12tn.

The 1.98 per cent month-on-month increase in personal loans suggests that the balance rose by roughly N40bn during the period. Retail loans, which include credit tied more directly to the purchase of goods and services, recorded a slower increase of 0.90 per cent.

The figures show that personal borrowing remained the main driver of Nigeria’s consumer-credit market, accounting for nearly two-thirds of outstanding credit.

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The increase came against a challenging operating environment for households and businesses. The CBN reported that economic activity remained weak in May, with its composite Purchasing Managers’ Index at 49.60 points, slightly higher than 49.40 points in April but still below the 50-point threshold separating expansion from contraction.

According to the bank, the contraction reflected subdued demand, declining new orders and elevated production costs. It also identified weak consumer spending and higher energy-related costs as pressures on the industry and services sectors.

Inflation also remained elevated during the period. Headline inflation increased to 15.93 per cent in May from 15.69 per cent in April, which the CBN attributed to persistent cost pressures and higher energy prices. However, month-on-month inflation slowed to 1.75 per cent from 2.13 per cent.

The combination of rising consumer credit and weak consumer spending suggests that households were increasingly accessing credit at a time when living and operating costs remained under pressure.

A recent report Enhancing Financial Inclusion & Advancement noted that four in every 10 Nigerians borrowing from formal financial institutions now take loans mainly for consumption and coping needs, as rising financial pressures increasingly push credit away from productive activities.

The 2026 Access to Financial Services in Nigeria Survey revealed that 40.8 per cent of formal borrowers used loans for coping and consumption, up sharply from 31.7 per cent in 2023.

The 9.1 percentage-point increase made coping and consumption the largest purpose of formal credit, overtaking productive enterprise borrowing, which fell from 40.2 per cent to 34.3 per cent during the same period.

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Borrowing for household assets also declined from 25.2 per cent to 23.4 per cent. The report warned, “Coping/consumption purposes rose from 31.7 per cent to 40.8 per cent; productive purpose fell from 40.2 per cent to 34.3 per cent. We need to ensure that credit builds productive capacity and does not produce distress.”

Formal credit use increased from six per cent of adults in 2023 to 10 per cent in 2026, with about 11.9 million Nigerians borrowing from regulated providers. When informal sources were included, 36 per cent of adults had access to some form of credit.

Credit use among informally employed Nigerians tripled from five per cent to 15 per cent, while borrowing among people aged 18 to 35 rose from four per cent to 10 per cent. Business owners recorded an increase from four per cent to 10 per cent, while farmers rose from two per cent to six per cent.

However, the report found significant distress among borrowers. About 45.8 per cent of formal-credit users reported some or serious repayment stress, while 83.8 per cent experienced ongoing financial stress.

Source: punchng.com

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NAFDAC seizes N300m banned drinks in Lagos

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The National Agency for Food and Drug Administration and Control has seized alcoholic beverages worth an estimated N300m packaged in sachets and PET bottles below 200ml during enforcement operations in Lagos State.

NAFDAC disclosed this in a statement shared on its Facebook page on Sunday, adding that some distributors and retailers involved in the sale of the prohibited products were arrested.

The agency said the enforcement operations were carried out at Ile-Epo Market, Ojuwoye Market in Mushin and Oke-Arin Market on Lagos Island.

“Officials evacuated several cartons of alcoholic beverages packaged in sachets and PET bottles below 200ml from these locations.

“Distributors and retailers were arrested during operations at Ile-Epo Market, while raids were also conducted at Ojuwoye Market, Mushin, and Oke-Arin Market, Lagos Island,” the statement said.

NAFDAC said investigations revealed that some distributors and retailers were hoarding the prohibited products amid increased demand and rising prices.

The agency said the enforcement was part of efforts to ensure compliance with the ban on the sale and distribution of alcoholic beverages packaged in sachets and PET bottles below 200ml.

It warned distributors, retailers and other operators against selling, distributing or hoarding the prohibited products.

“NAFDAC emphasises that the ban remains in force and warns distributors, retailers and other operators against the sale, distribution or hoarding of the prohibited products.

“The value of the seized products is estimated at N300m,” it stated.

PUNCH Metro reported on August 25 that NAFDAC ordered manufacturers of banned alcoholic beverages packaged in sachets and polyethylene terephthalate bottles below 200ml to recall the products nationwide or risk closure of their facilities.

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NAFDAC had also vowed to fully enforce the Federal Government-approved prohibition of alcoholic beverages packaged in sachets and PET or plastic bottles below 200ml, warning that the ban was irrevocable.

The agency had stated that the years of grace given to manufacturers by the Federal Government to stop producing the products had expired.

Source: punchng.com

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