The Executive Chairman of the Nigeria Revenue Service, Zacch Adedeji, said inflation in Nigeria could have climbed as high as 120 percent had the Federal Government not pursued sweeping economic reforms over the past several years. Adedeji delivered the assessment in Abuja during the commissioning ceremony for the NRS headquarters, asserting that the policy framework helped anchor prices and reverse macroeconomic deterioration.
"If you've not taken that decision, Mr President… the inflation would have been 75 to 120 percent," Adedeji said. "Today, inflation stands around 15 percent and is declining." The NRS chairman framed the moment as a decisive break from accumulated structural imbalances that had accumulated across Nigeria's economy in prior years.
Three Pillars of Reform
Adedeji identified three interlocking reforms that drove the country's economic turnaround: the removal of fuel subsidies, the unification of exchange rates, and the implementation of the naira-for-crude initiative. Data presented during his address indicated that without these measures, annual inflation could have spiraled to between 75 and 120 percent, compared with the roughly 15 percent observed currently.
The subsidy removal proved particularly consequential for public finances. Adedeji warned that at an oil price of $120 per barrel, the cost of maintaining fuel subsidies would have reached between N38 trillion and N52 trillion annually. That figure alone would have consumed approximately 76 percent of the Federal Government's N68 trillion budget, leaving virtually no fiscal room for infrastructure, social programs, or debt service. Adedeji described the subsidy elimination as a fiscal imperative rather than a discretionary policy option.
Exchange Rate Unification and External Position
The consolidation of Nigeria's multiple exchange rate windows also featured prominently in Adedeji's remarks. Prior to the reforms, the official exchange rate had fluctuated between N460 and N700 per dollar, while the parallel market traded at rates between N3,500 and N4,500, creating wide disparities that fueled arbitrage and imported inflation. The unification process eliminated these distortions, stabilizing the currency and reducing pressure on domestic prices.
Beyond the currency dimension, Adedeji said the reforms had strengthened Nigeria's external position substantially. He cited net reserves rising to approximately $34 billion under the reformed framework, compared with a scenario in which reserves would have fallen below $2 billion without the policy changes. The improvement reflected a combination of better trade balances, capital inflows, and reduced pressure on the central bank's intervention capacity.
Revenue Expansion and Tax Rationalization
Adedeji also highlighted improvements in fiscal performance driven by tax reforms and enhanced compliance mechanisms. Domestic revenue collections expanded from roughly N6.8 trillion five years ago to N28.7 trillion in 2025, representing a more than fourfold increase that Adedeji attributed to disciplined implementation and stronger governance structures.
The tax system itself underwent extensive rationalization. More than 60 previously fragmented tax laws were consolidated into a more coherent and enforceable framework, improving efficiency and predictability for businesses while reducing compliance burdens. Adedeji emphasized that the reform agenda did not depend on raising tax rates but rather on improving the quality of administration and closing evasion pathways.
Additional governance improvements included tighter controls on public financial flows, greater transparency in budgeting, and the introduction of the National Single Window to streamline trade processes. Adedeji said these measures collectively contributed to the broader macroeconomic stabilization and laid the groundwork for sustained growth.