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The Federal Government has said President Bola Tinubu inherited over $6 billion in unpaid petroleum import bills when he assumed office, describing the situation as one of the challenges that necessitated the administration’s economic reforms.
The government said the huge debt burden contributed to the foreign exchange crisis and undermined confidence in the Nigerian economy, particularly among investors and businesses that required access to foreign currency.
The Minister of Budget and Economic Planning, Senator Abubakar Bagudu, disclosed this on Wednesday in Abuja at a press briefing on the government’s scorecard on the impact of the economic reforms introduced by the Tinubu administration.
Bagudu said the administration had to make difficult policy choices to address the country’s fiscal challenges, including ending costly subsidy regimes and implementing foreign exchange reforms.
He said the policies had previously constrained government revenue and weakened confidence in the economy, making investors reluctant to commit capital to Nigeria.
According to him, the administration also recognised the need to restore confidence among those who continued to believe in the Nigerian economy by supporting strategic investments and strengthening the country’s productive capacity.
He cited the government’s efforts to support domestic refining as part of measures aimed at demonstrating its commitment to investors and reducing the country’s dependence on imported petroleum products.
The minister said the government had also prioritised security, human capital development and critical infrastructure as part of its reform strategy.
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He explained that the reforms were not solely about increasing government revenue but also about creating an environment that would restore investor confidence and improve economic growth.
Bagudu said Nigeria’s revenue-to-GDP ratio had continued to improve but remained below the level required to adequately fund the country’s development needs. He stressed that the country was “nowhere near where we want to be” in terms of revenue, subsidy savings and economic growth, noting that further reforms would therefore be necessary.
He said the government was also investing savings and borrowed funds in projects across the six geopolitical zones, stressing that improved infrastructure and connectivity were essential to strengthening economic activity across the federation.
The minister urged Nigerians and stakeholders, including the media, to support the reform process, saying sustained improvement in revenue generation and investor confidence was critical to achieving the administration’s economic objectives.
“Those policies were not just limiting government revenue or even bankrupting us. They have led to a lack of confidence in the economy by those who bought capital. So those who bought wealth are not enthusiastic about their money in our account.
“One day he was paralysed when he discovered that we have inherited over $6 billion of unpaid petroleum imports. He said, we don’t even have the foreign exchange. So actually, NNPC was borrowing money to import. That’s how ridiculous it was.
“We are nowhere near where we want to be, even with revenue, with subsidy, with growth. That is why we have to continue to get into the reforms. That’s why the Honourable Minister was calling on all of you to support us so that our revenue-to-GDP ratio will continue to improve.”
