By Juliet Ezeh
Nigeria’s ongoing tax reforms could mark a structural turning point for Africa’s largest economy, positioning the country for stronger domestic revenue mobilisation and reduced reliance on external financing, the Director of the Intergovernmental Group of Twenty-Four (G-24), Iyabo Masha, said on Saturday.
Speaking ahead of the G-24 Technical Group Meeting scheduled for February 18–20 in Abuja, Masha said efficient taxation remains the most stable pathway for developing countries seeking long-term economic transformation.
“Tax and domestic resource mobilisation are fundamental to economic development,” she said, noting that taxation enables governments to finance infrastructure, education, healthcare, and security without excessive macroeconomic instability.
From Fragmentation to Formalisation
Nigeria’s tax-to-GDP ratio has historically remained among the lowest globally, reflecting structural weaknesses in revenue collection and a fragmented tax framework.
Masha described Nigeria’s previous tax architecture as “very fragmented,” with weak implementation mechanisms limiting revenue performance.
She said current reforms aim to widen the tax net, reduce inefficiencies, and modernise capital taxation structures to improve productivity.
The reforms may involve both reductions and increases in certain tax rates but are ultimately designed to encourage formalisation and strengthen public finances.
“It will be painful in the initial period. But over time, it would allow the Nigerian economy to transition into a real modern economy that will be able to meet the aspirations of its people,” she said.
Domestic Revenue vs External Dependence
The meeting’s theme “Mobilising Finance to Promote Sustainable, Inclusive, and Job-Rich Economic Transformation” reflects growing urgency among developing economies to reduce vulnerability to global financial shocks.
Founded more than five decades ago, the Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development was established to amplify the collective voice of developing economies in global financial negotiations, particularly within the Bretton Woods institutions.
The bloc engages directly with the International Monetary Fund (IMF) and the World Bank, where advanced economies often hold significant influence.
Masha highlighted exchange-rate spillovers and dollar dominance as persistent structural challenges for developing countries.
“The world is a dollar world,” she said, underscoring the vulnerability of emerging economies to currency volatility and capital flow reversals.
Nigeria currently chairs the G-24 and is hosting approximately 45 international delegates, alongside officials from the Ministry of Finance and the Central Bank of Nigeria.
Taxing the Digital Economy
One key discussion at the Abuja meeting will focus on digital services taxation particularly how governments can effectively tax multinational technology firms that generate significant revenues without physical presence in local markets.
“More importantly, on how countries can better tax the likes of Google and Facebook,” Masha said, referring to global debates over digital tax frameworks.
The issue has gained prominence as developing economies seek to capture revenue from cross-border digital commerce and platform-based services.
Climate Transition and Fiscal Balancing
Climate finance and energy transition will also feature prominently in discussions.
Masha noted that oil-dependent developing economies face a dual challenge: maintaining fiscal stability while transitioning toward cleaner energy sources.
“Oil extractive industries are major sources of revenue, employment and jobs in these countries,” she said. “But on the other hand, they are now looking at how to move away from that.”
Balancing revenue needs with climate commitments remains a core policy dilemma for many African exporters.
Financial Inclusion and Monetary Stability
The G-24 meeting will also address financial inclusion and digital transformation.
Masha said digitalisation has improved financial access in some countries from about 40% to as high as 90%. However, rapid expansion of digital finance also introduces new regulatory and monetary stability risks.
She warned that artificial intelligence and technological disruption could reshape global productivity within the next decade, potentially widening inequality between advanced and developing economies.
Global cooperation on data governance and privacy standards, she added, will be critical.
Regional Integration and Debt Sustainability
On regional integration, Masha said political tensions in West Africa should not derail economic cooperation.
“There’s political fragmentation in West Africa, but it shouldn’t really stop economic cooperation,” she said.
She also acknowledged rising debt-servicing pressures since the COVID-19 pandemic but pointed to the G20-backed Common Framework for debt restructuring as a mechanism countries can use to manage fiscal strain.
“The important thing is for countries to manage their debt in a very sustainable way so that they don’t find themselves in a hard spot,” she said.
A Broader Strategic Shift
With Nigeria hosting the meeting and leading reform efforts at home, analysts say the country is attempting to reposition itself not just as Africa’s largest economy, but as a policy leader within the Global South.
If successfully implemented, Nigeria’s tax reform agenda could serve as a blueprint for broader fiscal modernisation across emerging markets.
Juliet Ezeh is the founder and chief reporter at Westbridge Reporters with over 7 years of experience in journalism. She covers crime, industry, policy, and social developments, delivering timely and accurate reporting.