By Joseph Erunke, Abuja
A policy group, the Independent Media and Policy Initiative (IMPI) says the economic model adopted by the President Bola Tinubu administration since assuming office has proved to be better than those deployed by previous governments.
In a policy brief signed by its Chairman, Dr Omoniyi Akinsiju, the think tank argued that there are enough indices to show that President Tinubu has been resetting the country’s economic building blocks with impactful policies in the last 36 months.
This, according to IMPI, is why there has been a substantial decline in the country’s debt service-to-revenue ratio regardless of the administration’s borrowing plan.
It said: “We must quickly note that it is to the credit of the Tinubu administration that by October 2025, just about 29 months after it assumed office, it reduced the country’s debt profile to $94.2bn from $108.23bn.
”Coupled with this is the reduction of the debt service-to-revenue ratio from 97% in 2023 to 50% in 2025. This represents a shift in Nigeria’s macroeconomic fundamentals, with not just Nigeria’s debt-to-GDP ratio declining to sustainable levels, but also a substantial decline in the debt service-to-revenue ratio.
”We note, nevertheless, that between then and April 2026, new debt acquisition increased the national debt to about $110.97bn, translating to a new debt acquisition of up to $16.77bn. We cross-reference this against the $60bn revenue accrued to the federal government between 2023 and 2026, and the infrastructural undertakings of the administration since assuming office and found justification for the debt in the face of constrained revenue compared to the period between 1999 and 2015.
”Be that as it may, Nigeria’s debt-to-GDP ratio as of April 2026 stood at a low 32.3%, a reduction from 35.5% in 2025. This creates fiscal breathing room and keeps the country below international distress thresholds, reassuring foreign direct investors, helping maintain credit ratings, and preventing default risks.
”On this count, we find these fiscal accomplishments worthy of note and commendation. This is especially so against the background of the vociferous, false accusations of high debt acquisition against the Tinubu administration from some quarters.”
The think tank also noted that the removal of fuel subsidy had been instrumental to Nigeria’s effective debt management and economic buoyancy on the watch of President Tinubu.
”A major underlying factor in the reduction and management of debts by the Tinubu administration, among others, was the removal of fuel subsidy, which had become a fiscal monstrosity for Nigeria’s economy.
”According to the Nigeria Extractive Industries Transparency Initiative (NEITI), the country spent a whopping $81.45bn on subsidies between 2005 and 2022. The highest spending was recorded between 2010 and 2014, a four-year period, at $42bn while a lower expenditure of $23.3bn was incurred over a seven-year period between 2015 and 2022. In short, these subsidies equalled the country’s capital expenditure for 10 years between 2011 and 2020, thereby dwarfing allocations to all critical areas of the economy.
”The removal of fuel subsidy in May 2023 triggered a massive boost in Federation Account Allocation Committee (FAAC) monthly distribution to the three tiers of government. Since then, total monthly allocations shared have frequently exceeded N1.5trn post-subsidy, compared to pre-subsidy averages of roughly N650bn.
”This has implications for available funds for development at the state and local government levels. Before now, most of the sub-nationals have had to sustain their respective recurrent expenditure through commercial loans for salaries, allowances and a sprinkling of infrastructure they could afford within the limit of available resources,” the policy group said.
IMPI also recalled how the Tinubu administration decided to end a foreign exchange policy that cost the country $388bn in 23 years and opted instead to harmonise the country’s multiple FX windows.
