Keypoints:
- Wale Edun warns global trade fragmentation threatens Nigeria
- Government prioritises investment over new borrowing
- Tax and revenue reforms target long-term stability
NIGERIA’S finance minister Wale Edun has warned that escalating global trade tensions and weakening multilateral cooperation could threaten Nigeria’s economic growth, even as Abuja steps up efforts to attract long-term investment following wide-ranging reforms.
Speaking with Bloomberg Television on the sidelines of the World Economic Forum in Davos earlier this week, Edun said renewed tariff threats under the Trump administration risked deepening global economic fragmentation.
The remarks come as Nigeria seeks to consolidate macroeconomic stabilisation measures introduced since 2023 — including fuel subsidy removal, foreign exchange liberalisation and tax restructuring — while reducing dependence on debt and repositioning the country as an investable destination amid rising geopolitical uncertainty.
Trade fragmentation raises concern
Edun said open global trade remains essential for developing economies seeking sustained expansion.
‘Countries like Nigeria normally benefit from expanding trade, which leads to increased output,’ he said. ‘But in a situation where the world is fragmenting — moving away from multilateralism and global trade — that will lead to less trade, less growth and fewer opportunities.’
He warned that declining trade flows would inevitably weaken investment and job creation.
‘At the end of the day, that means less growth for societies like ours,’ he added.
US tariffs add uncertainty
Asked about Washington’s increasingly assertive trade posture — including tariff threats and geopolitical signalling — Edun said Nigeria was choosing pragmatism rather than alarmism.
‘We try to stay positive,’ he said. ‘Nigeria has resources. We have critical minerals. If we are asked to do a transaction, it should be mutually beneficial. That’s how we approach it.’
Shift away from borrowing
Nigeria’s projected 2026 budget deficit has widened on paper following approvals by the National Assembly, but Edun stressed that the government’s strategy has shifted fundamentally.
Under President Bola Ahmed Tinubu’s Renewed Hope Agenda, the emphasis has moved from debt accumulation to consolidation.
‘After removing major distortions and stabilising the economy, the focus now is to rely less on borrowing and drive investment,’ he said.
Davos, he added, offered an opportunity to reset Nigeria’s international economic narrative.
‘We’re here to tell the Nigerian story and to show that Nigeria is investable now that the macroeconomic environment has stabilised.’
Eurobond issuance not imminent
While Nigeria retains the option of returning to international capital markets, Edun signalled caution on further Eurobond issuance.
‘The market has to be receptive, you must remain within your borrowing margins, and the timing has to be right,’ he said.
Although Nigeria was well received during its last Eurobond sale, he stressed that debt issuance was no longer the preferred strategy.
‘Our emphasis is on investment — particularly domestic investment — and increasing domestic savings to grow the economy.’
Revenue reforms take priority
Nigeria’s debt-to-revenue ratio remains among the highest globally, despite recent fiscal reforms.
Edun said correcting the imbalance requires expanding revenues rather than accumulating more debt.
‘The issue is domestic resource mobilisation,’ he said.
Under ongoing tax reforms, Nigeria aims to raise its tax-to-GDP ratio from about 13 percent to 18 percent in the near term, with longer-term ambitions of exceeding 20 percent.
Automation of tax and customs systems is intended to close leakages created by manual processes.
‘Technology will help block loopholes and strengthen internal revenue generation,’ Edun said.
Private sector and diaspora focus
The finance minister said Nigeria’s private sector — responsible for roughly 90 percent of GDP — remains central to the growth strategy.
‘We want Nigerians to consume less, save more and invest more,’ he said, adding that diaspora Nigerians and foreign investors are also key.
Abuja is targeting capital from cash-rich regions including the Middle East, alongside expanded regional African investment.
IMF support not under consideration
Asked whether Nigeria risked seeking assistance from the International Monetary Fund, Edun said no formal threshold had been reached.
‘Not at the moment,’ he said. ‘The objective is simply to bring the debt-to-revenue figure down from where it is now.’
While dialogue continues with institutions such as the IMF and World Bank, he said Nigeria’s reform record already exceeds traditional programme requirements.
‘What the president has achieved in two and a half years — nobody would reasonably impose that as a condition,’ he said.
He cited moderating inflation, improved exchange-rate stability and stronger output as evidence of progress.
Official figures show economic growth accelerating from just above 2 percent in early 2023 to more than 4 percent in the first half of 2025.
Industrialisation drive
Nigeria is expanding regional trade through the African Continental Free Trade Area and recently signed a Comprehensive Economic Partnership Agreement with the United Arab Emirates.
As global multilateralism weakens, Edun said regional markets are becoming increasingly important.
‘Multilateralism as a whole is receding,’ he said. ‘So we are relying more on our own resources — regional and continental.’
He highlighted Nigeria’s growing domestic refining capacity, noting that around 650,000 barrels per day of crude previously exported raw are now processed locally into petroleum and petrochemical products.
‘That puts Nigeria back on the path to industrialisation,’ he said.
Outlook for 2026
Despite confidence in reform momentum, Edun acknowledged that global uncertainty remains a major risk.
‘There is less predictability about the world order and the trade regimes we may face,’ he said.
Still, he expressed hope that global powers would step back from protectionism.
‘We hope there will be a pullback from fragmentation — towards more certainty and more multilateralism.’
