There is a cruel joke running through Nigeria’s economy: we keep mistaking band-aids for surgery. We believe that one bold announcement will suddenly turn the country into Dubai-on-the-Niger, and then sit back to complain when potholes still swallow cars, hospitals still run out of drugs, and the national grid still plays hide and seek.
For decades, fuel subsidy removal was cast as the silver bullet. End it, we were told, and Nigeria would enter paradise with free-flowing roads, gleaming trains, and salaries paid without tears.
But last Wednesday, the chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, while delivering a keynote address at a one-day capacity-building training on the Nigeria Tax Act (2025) for members of the State House Press Corps, put a match to that fantasy.
Speaking with the clinical calm of a man who has looked the numbers in the eye, he reminded us of a bitter fact: subsidy savings alone cannot transform Nigeria. Not now, not ever.
Our budgetary size, he noted, is less than $50 billion for a population of over 200 million. Netflix, he quipped, spends more than that on content. And here we are, trying to run a continental giant on the budget of a Hollywood studio.
This, he stressed, is why subsidy removal, while necessary, is not sufficient. It has merely kept the Federation from financial collapse. To transform Nigeria, he argued, requires something far deeper: genuine fiscal reform, institutional consistency, and a national acceptance that prosperity is not powered by wishful thinking but by revenues that match our ambitions.
Let’s start with the fantasy. For years, subsidy removal was sold as the golden gate to national prosperity. The argument was seductive: stop burning billions on cheap petrol, and suddenly we’d have money for roads, schools, hospitals, and power. It was a simple story in a country tired of complex problems.
But here’s the inconvenient truth: those billions, though significant, are drops in a much larger ocean of need. Oyedele’s revelation is sobering—our combined annual spending at the federal, state, and local levels is under $50 billion.
To put that in perspective, South Africa’s budget for a population a quarter our size is three times bigger. Lagos may boast of Africa’s largest city, but our national wallet is thinner than a struggling startup’s cash flow.
The result is obvious. Even if we stopped corruption tomorrow, fired every ghost worker, and turned every inflated contract into a fair deal, the resources at hand cannot carry Nigeria into the modern age. Subsidy removal was survival, not prosperity. It plugged a hole in the sinking ship, but the vessel still needs an engine powerful enough to move.
To appreciate the scale of the mess, remember where we came from. Under the subsidy regime, the Nigerian National Petroleum Company Limited (NNPC) not only stopped remitting revenue to the Federation Account, but it even mortgaged future barrels of crude as collateral for petrol imports. We were, quite literally, borrowing tomorrow’s oil to buy yesterday’s petrol. That is not just bad economics; it is national self-sabotage.
By ending the subsidy, the Tinubu government did what previous governments tiptoed around: it pulled Nigeria back from the cliff of fiscal suicide. But stopping the bleeding is not the same as restoring health.
Oyedele’s point is clear: subsidy removal alone cannot fix roads, build hospitals, or modernise infrastructure. For that, we need fresh, sustainable revenue.
Consider this: South Africa’s infrastructure-to-GDP ratio stands at 85 per cent. Nigeria’s hovers around 30 per cent. That gap isn’t just a number; it is the pothole that damages your car, the power cut that ruins your business, the hours lost in traffic because bridges are too few and roads too narrow. It is also why productivity in Nigeria limps while others sprint.
We can’t grow an economy when goods crawl on bad highways and farmers can’t get produce to market. That is why fuel-related levies are not strange; more than 150 countries dedicate such taxes to maintain roads.
In Nigeria, however, any mention of a surcharge or toll instantly sparks outrage. But as Oyedele pointed out, the five per cent fuel surcharge has existed in law since 2007 under the FERMA Act. The new tax reforms simply harmonise and redirect it within a broader, transparent framework. In short, it’s not new.
But Nigeria’s real disease is not poverty of money—it is poverty of consistency. Oyedele recalled two spectacular examples. First, when toll gates were demolished in the early 2000s, they were not reformed. Billions vanished in foregone revenue, only for us to circle back two decades later, still debating tolling. Second, the reversal of refinery privatisation. If those sales had held, Nigeria would have saved over ₦20 trillion and created jobs. Instead, we cling to comatose refineries like sentimental relics, pouring money into maintenance contracts that produce no fuel.
We are like a driver who throws away his car keys in a fit of anger, then spends years begging mechanics to hotwire the car. Our economy bleeds not just from corruption, but from inconsistency. Every reversal costs money, jobs, and credibility. That is why Oyedele called for constitutional safeguards to protect reforms from political U-turns. Without them, every new government can undo the hard sacrifices of the last, and Nigeria remains trapped in an endless cycle of starting over.
Perhaps the most misunderstood part of the reform package is the tax. Social media panic has painted Oyedele as a man plotting to tax akara sellers, church offerings, and children’s piggy banks.
The truth is the opposite.
Under the new law, small businesses with an annual turnover below ₦100 million will pay zero corporate tax. Low- and middle-income earners—97 per cent of the workforce—are exempted from several levies.
Essential services like food, education, and healthcare are zero-rated for VAT, meaning producers can reclaim their input costs, lowering prices for consumers.
This is not about squeezing the poor. It is about expanding the base fairly, cutting out multiple taxation, and ensuring the system works for everyone. As Oyedele put it, “We are not creating another layer of bureaucracy. If you already have a National Identification Number or BVN, that is your tax ID.” Simple. Efficient. Transparent.
The problem, of course, is not just numbers—it’s trust. Nigerians have been promised prosperity too many times to take reforms on faith. Every fuel price hike has been sold as the last pain before the dawn, and every tax promise has been met with suspicion. Oyedele knows this, which is why he urged the media to report reforms responsibly.
Negative narratives, he warned, could derail reforms before they take root. In other words, if Nigerians are told daily that the reforms are designed to punish them, the public pressure could force another policy reversal, taking us back to square one. He has a point. But the government too must earn trust by showing results—better roads, steady power, cheaper food. Without visible wins, patience runs out.
Tinubu has set an audacious goal: a $1 trillion economy by 2030. To get there, Nigeria must grow at least seven per cent annually from 2027. Oyedele framed this not just as an economic necessity, but as a moral imperative. Poverty is not just statistics—it is hunger, insecurity, and despair. Without rapid growth, the country risks drowning in its own demographics.
“A nation of 200 million cannot run on a budget smaller than that of a mid-sized European country,” he argued. “We must raise revenue, save more, and invest better.”
So what should we take away from Oyedele’s lecture? First, subsidy removal is not a jackpot. It is a down payment to stop the collapse. Second, Nigeria’s fiscal space is too small, and the only way out is deeper reforms—tax harmonisation, infrastructure levies, and better savings. Third, consistency matters as much as policy. A country that demolishes toll gates today and debates rebuilding them tomorrow is not serious.
Finally, citizens must temper cynicism with realism. Reforms are never painless. But with safeguards for the poor and a commitment to visible results, the pain can be managed. The choice is not between suffering and paradise; it is between temporary sacrifice for sustainable growth, or endless cycles of fake fixes.
Nigeria’s fiscal journey is like adolescence: painful, awkward, and unavoidable. We can cling to childish habits—spending what we don’t earn, reversing policies on a whim, hoping for miracles—or we can grow up, accept hard truths, and build institutions that last.
Subsidy removal brought us breathing space. What we do with it will decide if we leap forward or slump back. Oyedele has lit the torch of realism. It is up to Nigeria’s leaders—and its people—to carry it into a future where budgets are not jokes, policies are not toys, and prosperity is not a myth.
Because in the end, our future will not be written by subsidy savings. It will be written by whether Nigeria finally chooses consistency over convenience, growth over gimmicks, and fiscal maturity over fiscal fantasy.
