FG Links Cost of Capital Reform to Nigeria’s $1 Trillion Economy Ambition

The Federal Government has said its proposed cost-of-capital reform is central to achieving Nigeria’s ambition of building a $1 trillion economy by 2030, as it seeks to unlock private-sector investment without introducing new subsidies.

Speaking at the 7th Africa Emerging Markets Forum in Abuja on Thursday, Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, said the government is developing a framework to lower borrowing costs for businesses while complementing the Central Bank of Nigeria’s efforts to maintain macroeconomic stability.

The FG cost of capital reform, according to Oyedele, is designed to address one of the biggest constraints facing businesses—high financing costs—which continue to limit investment, productivity and job creation.

“There is a high cost of borrowing in an economy where you need growth to deliver results from reforms,” Oyedele said.

“Within the Ministry of Finance, we are working on a framework on how to bring down the cost of capital without introducing subsidies because we believe we can complement the work of the monetary authorities.”

Nigeria has experienced elevated borrowing costs over the past two years as the Central Bank maintained a tight monetary policy stance to curb inflation and stabilise the economy. While the policy has helped improve macroeconomic conditions, businesses have continued to face expensive credit, limiting expansion plans and new investments.

Oyedele said reducing the cost of capital is expected to stimulate private sector investment by making financing more affordable for businesses across key sectors of the economy.

He explained that the proposed framework is intended to work alongside monetary policy rather than replace it, enabling fiscal and monetary authorities to pursue economic growth without distorting market signals through subsidies.

According to him, the initiative forms part of the government’s broader economic reform agenda, which includes fiscal consolidation, tax reforms, foreign exchange market liberalisation and measures aimed at improving Nigeria’s investment climate.

Although details of the framework are yet to be released, Oyedele said the objective is to create conditions that encourage investment, increase productivity and generate sustainable economic growth.

The finance expert also disclosed that the Federal Government will soon publish a detailed report outlining the savings generated from the removal of fuel subsidies and the liberalisation of the foreign exchange market, as well as how those funds have been spent.

The announcement follows increasing public demand for greater accountability over the proceeds realised from the administration’s economic reforms.

“The combined impact of the subsidy on fuel, as well as what I call the subsidy on FX, was about 5 per cent of GDP,” Oyedele said.

“In a few days, you will see the detailed analysis because we believe we owe a duty to explain what we do to the Nigerian people. That’s what transparency looks like.”

According to him, much of the savings have been channelled towards servicing higher debt obligations following the end of deficit financing through the Central Bank of Nigeria, implementing the N70,000 national minimum wage, financing social intervention programmes and supporting critical government obligations.

He added that the Nigerian Education Loan Fund (NELFUND) has provided tuition support and monthly upkeep allowances to more than 1.5 million students.

Defending the administration’s reform agenda, Oyedele said Nigeria is beginning to record measurable improvements across several macroeconomic indicators.

He cited stronger foreign portfolio and direct investment inflows, improved investor confidence and robust capital market performance as evidence that recent reforms are producing positive outcomes.

According to him, Nigeria’s stock market is the world’s best-performing equity market so far in 2026, while the economy expanded by 3.89 per cent in the first quarter of the year.

He also noted that the economy recorded 11.2 per cent growth in dollar terms in 2025, while the non-oil sector grew by 3.94 per cent in the first quarter, reflecting continued diversification away from crude oil.

Oyedele further said Nigeria’s external reserves have exceeded $50 billion, inflation has moderated from its 2024 peak, banks raised a combined N4.65 trillion during the recent recapitalisation exercise, with more than 70 per cent coming from domestic investors, and the country exited the Financial Action Task Force (FATF) grey list last year.

“Capital has no passports, no charm and no patriotic loyalty. It responds to evidence, not rhetoric,” he said.

“Every one of these is a fact you can verify, not a claim you have to trust.”

Despite signs of macroeconomic improvement, Oyedele acknowledged that economic stability alone would not be enough unless it translates into higher incomes and better living standards for Nigerians.

“A stable economy can still be a stagnant one if growth is weak,” he said.

“We have done the gruelling foundational work of the first phase. Our task now is converting that stability into investment, investment into productivity, productivity into decent jobs and decent jobs into incomes that Nigerian families can actually feel.”

He said the Federal Government has expanded cash transfers to 15 million vulnerable households, helping lift an estimated 7.5 million Nigerians out of extreme poverty, while President Bola Tinubu recently launched a programme worth more than $3 billion to strengthen primary healthcare, basic education and support displaced communities.

Looking ahead, Oyedele reaffirmed the administration’s commitment to building a $1 trillion economy by 2030, stressing that the target would require sustained reforms, disciplined fiscal management and stronger collaboration between government and the private sector.

“A trillion-dollar Nigerian economy by 2030 is not a slogan; it is a target,” he said.

“Prosperity is never an accident. It is the deliberate product of sound policy, disciplined execution, effective coordination between fiscal and monetary authorities, and partnership between government and enterprise.”