By Abu Fouad

Over the past decade, Kano’s political landscape has been sharply polarized by the rivalry between the Gandujiyya and Kwankwasiyya movements. This division has often fueled incivility, prioritizing blind loyalty over constructive dialogue.

The recent, unexpected encounter at the Kano airport between Governor Abba Kabir Yusuf and former Governor Abdullahi Umar Ganduje underscores the importance of respect and dignity in politics—both in Kano and across Nigeria.

Governor Yusuf’s gesture of stepping out of his vehicle to greet former Governor Ganduje reflects a remarkable level of humility and statesmanship.

This simple yet profound act of courtesy demonstrates that politicians can rise above their differences and extend mutual respect, regardless of contrasting views or party affiliations.

The unplanned meeting sets a positive precedent, promoting a culture of civility and respect in political life. The widespread commendation that followed serves as a reminder that politics need not be driven by divisiveness or hostility.

When leaders act with dignity and respect, they help bridge divides and foster a more united and harmonious society. Kudos to Governor Abba Kabir Yusuf and former Governor Abdullahi Umar Ganduje for showing that respect and kindness can have a profound impact even in the often-polarized kano  politics.

Given the intense rivalry between Kano’s two dominant political blocs, few expected Governor Yusuf to extend such a gracious gesture toward his predecessor. Their actions offer a valuable lesson to politicians and supporters alike, especially those who resort to insults and hostility on social media.

The recent act of goodwill between Governor Yusuf and former Governor Ganduje serves as a powerful reminder to overzealous supporters who contribute to a toxic political climate by using disrespectful language—particularly toward elders—on social and traditional media platforms.

Today, many respected figures in Kano face online attacks from individuals emboldened by partisanship to insult anyone with differing views. Yet Governor Yusuf’s gesture embodies unity, compassion, and empathy—transcending political and ideological boundaries. By choosing this path, he evokes memories of a time when political differences did not undermine mutual respect or social cohesion. His action stands as a beacon of hope for restoring civility and respect in Kano’s political discourse.

Abu Fouad writes in from Kano

By Blaise Udunze

In today’s Nigeria, one uncomfortable truth has become glaring that the fiscal authority collects, but it does not build. It borrows, but it does not produce. It taxes, but it does not empower. For years, the Nigerian government has pursued fiscal policies more obsessed with revenue than with results.

The removal of fuel subsidy in 2023 was supposed to mark a new dawn. It was sold to Nigerians as a path to fiscal freedom as a step that would redirect over $10 billion annually from consumption subsidies to capital investment, infrastructure, health care, education and job creation. Two years later, that promise has vanished into a fog of political spending and bureaucratic complacency.

The question now is not how much the government has collected, but what it has done with it. What tangible impact have these revenues from taxations and borrowings had on the real sector which is the part of the economy that actually produces goods, creates jobs, and drives development?

A Fiscal Authority Fixated on Taxation, Not Production

Nigeria’s fiscal policy in recent years has tilted dangerously toward aggressive revenue collection. Under immense pressure to grow non-oil income, the Federal Inland Revenue Service (FIRS) has expanded its reach to virtually every corner of the economy. From VAT on electricity and telecommunications (data usage) to call credits, bank transactions to stamp duties on bank transfers, to levies on postal deliveries for online purchases, almost nothing escapes the government’s tax net.

The average Nigerian entrepreneur now faces a labyrinth of taxes such as company income tax, education tax, signage fees, land use charges, and a myriad of local levies. Yet the same entrepreneur operates in an environment defined by power shortages, failing infrastructure, forex volatility, and regulatory uncertainty. These are not conditions for business growth; they are conditions for extinction.

Taxation, in principle, should be a partnership between the state and the productive class as a social contract that trades compliance for development. But in Nigeria, taxation has become punishment, not partnership. The fiscal authority appears to be taxing poverty to sustain bureaucracy. It has forgotten that the strength of any economy lies not in how much it extracts, but in how much it enables.

Taxing Without Building

For a government that collects billions of naira daily from taxes, surcharges, levies, and newly designed revenue streams, it is difficult to find any visible reflection of these revenues in the productive base of the economy.

Based on FIRS and government releases, tax collections amounted to about N34 trillion in 2023-2024, and non-oil receipts reached around N20.6 trillion in January to August 2025, indicating total government collections of at least N50-N55 trillion since mid-2023, depending on how partial-year and FAAC items are aggregated and without double counting.

The contradiction is glaring that Nigeria’s fiscal managers have become more efficient at collecting taxes but less effective at building the economy that sustains those taxes.

The reality is sobering. SMEs that stand as the true backbone of national productivity are closing shop in droves. The cost of diesel, transportation, and rent have tripled, while the naira’s freefall continues to eat away at margins. Rather than offer relief, fiscal agencies have tightened the noose with new charges and penalties. The result is a climate of exhaustion and economic fatigue.

Borrowing Without Building

If taxation is squeezing businesses dry, borrowing is suffocating the nation’s future. As if taxes were not enough, Nigeria’s fiscal authorities have doubled down on borrowing, amassing debts at an unprecedented rate. These have resulted to spiral of loans justified in the name of development but rarely seen in tangible outcomes.

As of mid-2025, Nigeria’s total public debt has ballooned to N152.4 trillion, a staggering 348.6 percent increase since President Bola Tinubu assumed office in June 2023, when the figure stood at N33.3 trillion. For a country already struggling to meet basic obligations, this is unsustainable.

Reflecting on the wider African context, the picture is equally alarming. The continent’s external debt now exceeds $1.3 trillion, with debt servicing costs hitting $89 billion this year alone. Nigeria is one of the hardest hits, not merely by the size of its debt, but by its lack of productive return.

Even as businesses groan under the weight of multiple taxation, the Federal Government has kept its foot firmly on the borrowing pedal. Between July and October 2025, Nigeria’s fiscal authorities secured over $24.79 billion (plus €4 billion, ¥15 billion, N757 billion, $500 million in Sukuk) in new borrowings and facilities, the bulk of which were justified as “development financing.” Yet the real sector still awaits to feel the promised impact.

Over 25 percent of Nigeria’s annual revenue now goes into debt servicing, leaving little fiscal space for investment in health, education, or industry. Experts warn that when over 90 percent of government revenue is consumed by old debts, governance becomes survival, not progress.

Uche Uwaleke, professor of finance and capital markets at Nasarawa State University, said the high cost of debt repayment continues to undermine the country’s economic potential.

“Nigeria’s debt service ratio is inimical to economic development, chiefly because what could have been used to build infrastructure and invest in human capital is used to service debt,” Uwaleke told BusinessDay. “The opportunity cost for the country is high. To ensure debt sustainability, the government should tie future borrowings to self-liquidating projects that can generate revenue to repay the loans.”

At the 2025 IMF and World Bank Annual Meetings in Washington D.C., global leaders again pledged to tackle developing countries’ debt burdens. But as Nigeria’s borrowing continues unchecked through Eurobonds, sukuk, and bilateral loans. The question Nigerians should be asking is simple, who benefits from all this borrowing?

What is more troubling is the government’s pattern of borrowing to service past debts and fund recurrent expenditures. Instead of financing projects that create value, loans are spent plugging budget holes. The chain of debt grows longer, and the productive economy remains static.

We are witnessing a fiscal irony as in a nation borrowing to survive, not to thrive.

The Missed Opportunity of Subsidy Savings

The removal of fuel subsidy was supposed to free up capital for productive investments. Instead, it has freed up more money for recurrent consumption. Subsidy funds are now shared monthly among the three tiers of government, with no visible developmental footprint.

Nigerians were told that the subsidy windfall would improve power supply, roads, and transport infrastructure. But more than a year later, there is little to show.

In one of the world’s largest oil producing nations, fuel prices quintupled, increasing more than 514 percent from N175 in May 2023 to N900. Across the country, small businesses are closing down; transport fares remain unbearable; and electricity supply remains erratic. The fiscal authority appears to have replaced subsidy waste with revenue waste.

Instead of using subsidy savings to ignite productivity, the funds have been channeled into the same unsustainable cycle of political spending, salary payments, and administrative overheads. This is not reform, it’s redistribution without responsibility.

Where Is the Fiscal Policy Coordination?

The disconnect between Nigeria’s fiscal and monetary authorities has become a fundamental barrier to progress. While the Central Bank of Nigeria (CBN) tightens liquidity to control inflation, the fiscal authority simultaneously floods the economy with new taxes and levies, inflating business costs and undermining the same stability the CBN is trying to achieve.

The contradictions are endless. The CBN preaches financial inclusion, yet fiscal agencies impose bank transfer duties that discourage banking usage. The CBN claims to promote SME credit schemes, yet fiscal authorities drain disposable income with new taxes.

This absence of policy synergy sends mixed signals to investors and citizens alike. Businesses cannot plan, investors cannot forecast, and even the government’s own intervention funds lose impact. Nigeria’s economic management, as it stands, resembles an orchestra without a conductor.

State Governments as the Silent Beneficiaries

While the federal government collects the bulk of taxes, state governments have become silent beneficiaries of the subsidy savings. Each month, they receive billions from FAAC allocations swollen by oil receipts, VAT, and subsidy removals.

Based on data from NEITI and OAGF/NBS monthly communiqués, the conservative FAAC disbursement total from June 2023 to June 2025 stands at approximately N25.65 trillion, covering only months with publicly available and verifiable reports.

Yet, few states have anything to show for it. Industries are dying, roads are deteriorating, and capital budgets are chronically underfunded. In many states, governance has been reduced to salary payments and political campaigns, not development.

Nigeria’s fiscal success cannot be measured by how much Abuja collects but by what states deliver. Development is a chain, if one link is weak, the entire system collapses. Yet, most states continue to depend on federal allocations as a feeding bottle rather than a development engine.

The federal fiscal authority cannot claim progress while sub-national governments squander shared revenues without accountability. Until FAAC allocations are tied to measurable developmental outcomes, Nigeria will keep sharing poverty, not prosperity.

The Real Sector being Neglected and Starved

Nigeria’s real sector, particularly SMEs continues to suffer neglect. Despite contributing about 48 percent of GDP, accounting for over 90 percent of businesses and employing over 80 percent of the workforce, SMEs receive less than 5 percent of total bank credit. Fiscal policy has done little to change that.

Rather than providing targeted tax reliefs, infrastructure subsidies, or credit guarantees, government policies have worsened the cost of doing business. The manufacturing sector’s growth rate remains sluggish, and capacity utilisation in many factories has dropped below 50 percent.

Manufacturers grapple with power cuts, forex scarcity, and multiple taxation. Many are forced to rely on expensive diesel generators, further eroding competitiveness. Import duties remain high, ports are congested, and logistics costs keep rising.

Ajayi Kadiri, Director-General of the Manufacturers Association of Nigeria (MAN), recently captured this frustration bluntly:

“We can’t plan under fiscal chaos. Manufacturing in my village is extremely expensive. Multiple levies, some without a legal basis, are suffocating businesses. You can wake up one day and see a 50 percent increase in port charges without prior consultation. That’s not policy that’s chaos.”

Kadiri’s statement is more than an industry complaint; it is a mirror of national dysfunction. When manufacturers cannot plan, the economy cannot grow. When fiscal policy becomes unpredictable, investment flees. The result is a landscape of abandoned factories, unemployed youth, and shrinking export potential.

In effect, the fiscal authority is extracting value without creating it. Government has become an expert in revenue collection but a failure in economic coordination.

The Human Cost of Fiscal Mismanagement

Behind the numbers lies a painful reality. Every percentage increase in tax or tariff translates into higher prices, lower wages, and fewer jobs. The removal of subsidy without a viable safety net pushed millions deeper into poverty. Despite the inflation claimed to have eased to 18.02 percent from 20.12 is still eroding purchasing power and diminished consumer demand, which is the lifeblood of production.

The market woman who pays for electricity she rarely gets, the manufacturer laying off workers due to diesel costs, the young entrepreneur crushed by levies, as these are not statistics. They are the casualties of a fiscal system that prioritises collection over compassion.

Instead of designing targeted support, energy rebates, SME tax credits, or rural infrastructure programs the fiscal authority has chosen the easier path by taking more from those already struggling. This short-term approach sacrifices long-term productivity for instant revenue gratification.

Need for Building, Not Just Taxing

To rescue the economy, Nigeria’s fiscal managers must adopt a production-first mindset. A nation cannot tax or borrow its way to prosperity. It must produce, build, and export its way there.

Rebalance fiscal priorities.

–       Channel subsidy savings into infrastructure, agro-industrial hubs, and SME credit facilities not recurrent spending.

–       Reward production, not compliance. Offer tax breaks for local manufacturers, exporters, and innovators.

–       Enforce fiscal transparency. Every borrowed dollar should be tied to measurable outcomes, with clear public reporting.

–       Align fiscal and monetary policy. End the contradiction between tax expansion and credit tightening.

–       Demand state-level accountability. States must show what they are doing with FAAC allocations through verifiable projects, not political slogans.

The Urgency of a Fiscal Rethink

Nigeria’s fiscal policy has lost its moral and developmental compass. It has become a machine that extracts without empowering as a structure more focused on sustaining government than building an economy.

Taxation should create an environment where businesses thrive. Borrowing should build the future, not mortgage it. And subsidy savings should become the foundation of national renewal, not political redistribution.

Until Nigeria’s fiscal authorities understand that revenue collection is not development, and that loans are not progress, the economy will remain trapped in a vicious cycle of taxing without building, borrowing without producing, and spending without transforming.

Blaise, a journalist and PR professional writes from Lagos, can be reached via: [email protected]

By Blaise Udunze

When the Central Bank of Nigeria (CBN) recently declared that the country was on course to becoming a $1 trillion economy through ongoing banking reforms, the statement was met with cautious optimism. To many, it sounded like a long-awaited promise of prosperity as a declaration that Nigeria’s economic renewal is finally underway. But behind the projection lies a critical question, if banking reforms alone drive the kind of broad-based, sustainable growth required to make Nigeria a trillion-dollar economy?

The truth, according to several experts and economic data, is that banking reforms though necessary are insufficient. The structure of the Nigerian economy is still too fragile, the real sector too weak, and the policy framework too inconsistent to sustain such lofty growth. Without targeted reforms that strengthen production, industry, and exports, the trillion-dollar dream risks remaining what one economist aptly described as a “mirage.”

Tilewa Adebajo, Chief Executive Officer of CFG Advisory, did not mince words when he addressed the subject on ARISE NEWS earlier this year. “We said Nigeria already has the potential of a $1 trillion economy. But $1 trillion economy is a mirage. We shouldn’t go there again,” he said. “If you do not have your policies in place, you cannot reach that $1 trillion economy.”

Adebajo’s caution strikes at the heart of the matter, saying potential is not performance. Nigeria has abundant human and natural resources, but poor policy implementation, weak governance, and persistent inflation continue to choke productivity and investment.

According to Adebajo, reforms alone cannot drive growth. “Reforms on themselves cannot be the solution or answer to growing the economy,” he explained. For him, the CBN’s focus on financial sector restructuring must be complemented by microeconomic solutions such as job creation, poverty alleviation, and social intervention policies that ease the hardship of ordinary Nigerians.

“There has to now be a human face,” he emphasized. Economic transformation, he argues, must not only be about GDP numbers but about improving the quality of life for millions trapped in poverty.

While the CBN’s recapitalisation directive aims to strengthen the banking system and attract foreign capital, many industry players insist that banking strength is meaningless without productive outlets for credit. The Group Managing Director of UBA Plc, Oliver Alawuba, made this clear at the Annual Conference of the Finance Correspondents Association of Nigeria (FICAN).

He stated that achieving the $1 trillion economy target “requires not just incremental growth, but structural shifts in how we approach banking, financial innovation, and sectoral development.”

For Alawuba, the real sector in agriculture, manufacturing, and services must become the true engine of growth.

“A vibrant real sector will drive employment, foster innovation, and strengthen the overall economy by reducing dependency on the oil sector,” he said.

Recapitalization alone, he noted, “is not enough; it must be followed by focused lending to strategic areas that promise the highest economic returns.”

This sentiment reflects a broader consensus among economists that credit must flow to where value is created. Yet, Nigerian banks often prefer the comfort of investing in risk-free government securities over financing industrial or agricultural expansion. The result is a financial system that thrives on paper profits but contributes little to real economic output.

Indeed, Nigeria’s real sector has remained under pressure for years. Manufacturing’s share of GDP still hovers around 10 to 12 percent, hampered by erratic power supply, high logistics costs, and dependence on imported inputs. Agriculture, employing over one-third of the population, remains largely subsistence-based and technologically backward. Small and Medium Enterprises (SMEs), which make up 90 percent of businesses and contribute 48 percent of GDP, continue to struggle with limited access to affordable, long-term credit.

Alawuba suggests that this is where the banking recapitalisation drive must meet fintech innovation. By creating products specifically tailored to SMEs such as flexible loan packages, digital lending tools, and market access platforms which banks can unlock exponential growth. He argues that the future of Nigeria’s economy depends on “the strategic alignment of policy, investment, technology, and, most importantly, our collective will to innovate and grow.”

However, achieving this alignment requires more than monetary engineering; it demands a complete rethink of fiscal and industrial policy. As Isa Omagu of the Bank of Industry (BoI) explained during the same forum, “The economy stands on both the monetary and fiscal sides; we need both sides to work together.” While the monetary side stabilizes prices, fiscal authorities must “come in on the issue of governance.” Nigeria’s biggest economic problem, he said, is simple: “We are not producing enough, and we cannot continue to consume imported goods and expect the economy to be robust.”

Omagu’s statement underscores the country’s most pressing contradiction as a consumption-driven economy that produces little of what it consumes. He called for deeper investment in agriculture, infrastructure, and services to minimize importation and reduce pressure on the foreign exchange market. “We cannot achieve a $1 trillion economy without focusing or boosting our production capacity,” he warned.

The Deputy Director of the Banking Examination Department at the Nigeria Deposit Insurance Corporation (NDIC), Emeka Udechukwu, echoed a similar concern. He warned that “without a vibrant real sector, the economy might not grow fast enough to hit the $1 trillion target.” He argued that while the CBN’s loan-to-deposit ratio policy was designed to compel banks to lend more to the productive sector, “fundamental infrastructural deficits” and policy inconsistencies have undermined its impact. “If there is challenge in the real sector of any economy, that economy is already challenged,” he said. “We have to go back to the real sector and do what we are supposed to do.”

This diagnosis aligns with what many analysts have long argued that Nigeria’s economic problem is not lack of money but lack of production. Trillions of naira circulate within the financial system, yet they rarely translate into new factories, expanded farms, or exportable goods. A $1 trillion GDP projection, therefore, may reflect currency devaluation or statistical rebasing more than genuine productivity gains.

The country’s overreliance on oil further complicates the path to sustainable growth. Data from the National Bureau of Statistics (NBS) shows that in the last quarter of 2023, crude oil accounted for over 81 percent of total exports, while non-oil exports amounted to just around N1 trillion. Even though non-oil exports grew by 38.5 percent in early 2024, their value remains meagre for an economy seeking diversification.

Nigeria’s non-oil export base including manufactured goods, agricultural products, and services remains underdeveloped. Experts argue that to escape this trap, Nigeria must learn from Asian success stories like Singapore and Vietnam, where industrialization, export-oriented manufacturing, and human capital investment transformed poor economies into global competitors.

Singapore, for instance, transitioned from high unemployment and poor infrastructure in the 1960s to one of the world’s richest nations through massive investment in education, manufacturing, and technology. Its top exports today include integrated circuits and machinery products that drive global industries. Similarly, Vietnam evolved from an agrarian, war-torn economy to a manufacturing hub exporting electronics, textiles, and footwear worth over $370 billion in 2022. Nigeria, by contrast, has watched its GDP fall from $400 billion in 2013 to around $250 billion by 2023.

Both countries demonstrate that industrialization, not financial speculation, drives long-term growth. As Uchenna Uzo, a marketing professor at Lagos Business School, put it, “Manufacturing and local production are the key things that can set Nigeria apart.” He added that Nigeria can also attract diaspora investment if it builds the right infrastructure and policy stability.

The lesson is clear; a trillion-dollar economy cannot be decreed from monetary policy statements or achieved through banking reforms alone. It must be earned through production, value addition, and innovation. Nigeria’s manufacturing base must expand, its agricultural productivity must rise, and its infrastructure such as power, transport, and logistics must be modernized.

Banking reforms should therefore serve as an enabler, not a substitute, for real sector development. The CBN’s recapitalization drive, while commendable, must be tied to sectoral targets. Banks that expand credit to manufacturing, agriculture, or export-oriented businesses should enjoy regulatory incentives, while speculative investments in non-productive assets should be discouraged.

Equally important is the need to tame inflation and stabilize the currency. As Adebajo noted, Nigeria can only sustain GDP growth of 8-10 percent if inflation is kept below 12 percent. Persistent inflation erodes purchasing power, deters investment, and undermines long-term planning. Without macroeconomic stability, even the best-intentioned reforms will falter.

Furthermore, there must be a coordinated industrial policy that aligns monetary, fiscal, and trade objectives. For instance, while the CBN seeks to strengthen the naira, the fiscal authorities must simultaneously support local manufacturers through tax incentives, infrastructure investment, and export facilitation. Import restrictions, when necessary, should be strategically designed to protect emerging industries without stifling competition.

Nigeria’s SME ecosystem also deserves targeted support. As the Bank of Industry’s Omagu and UBA’s Alawuba both emphasized, SMEs are the backbone of employment and innovation. Yet, they are often the most credit-starved. Government-backed credit guarantees, venture funds, and fintech-driven micro-lending could bridge this gap, helping small enterprises become the foundation of Nigeria’s industrial base.

Equally, agricultural transformation must move beyond subsistence farming to agro-industrialisation such as processing, packaging, and exporting value-added products rather than raw materials. This approach will not only increase farmers’ incomes but also create jobs and reduce pressure on foreign exchange demand. A focus on value chain development from farm to factory to market will ensure that the benefits of growth reach ordinary citizens.

At a time when 133 million Nigerians are multidimensionally poor, according to NBS data, the urgency for real sector reforms cannot be overstated. An economy that depends overwhelmingly on oil exports, consumes more than it produces, and imports most of its essential goods cannot claim to be on the path to a trillion dollars in any meaningful sense.

The government’s projection of achieving a $1 trillion economy by 2030 could still be attainable but only if the country embarks on deep structural reforms. These include ensuring reliable power supply, revamping transport infrastructure, tackling corruption that inflates project costs, and improving governance and policy consistency.

Nigeria must also invest aggressively in education and skills development, following the example of countries like Singapore, which turned human capital into its greatest economic asset. A young, skilled population can drive innovation, entrepreneurship, and technological adoption which is the real levers of modern economic power.

The road to a trillion-dollar economy will not be paved by balance sheets and banking reforms alone. It will be built by factories, farms, and entrepreneurs. It will depend on a nation’s ability to produce, innovate, and trade competitively. It will require a deliberate shift from policy announcements to policy execution, where government actions translate into measurable outcomes for citizens.

Nigeria’s trillion-dollar dream is achievable, but not on the current trajectory. Without revitalizing the real sector, ensuring macroeconomic stability, and investing in people and production, the CBN’s optimism risks sounding like rhetoric detached from reality. Banking reforms may stabilize the system, but only real sector reforms can sustain growth.

In the end, Nigeria’s economic destiny will not be determined in banking halls but in the fields, factories, and workshops where real value is created. The trillion-dollar economy will not come from financial statements, it will come from the sweat of productive Nigerians who, if properly empowered, can transform potential into prosperity.

Blaise, a journalist and PR professional writes from Lagos, can be reached via: [email protected]