The World Bank has urged the Nigerian government to implement new tax measures as a prerequisite for accessing the remaining funds from a $750 million loan under the Accelerating Resource Mobilisation Reforms (ARMOR) program. This initiative aims to enhance Nigeria’s non-oil revenue streams and ensure fiscal sustainability.
Key Highlights:
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Tax Reforms on ‘Sin Goods’: The World Bank recommends increasing excise duties on products such as alcoholic and non-alcoholic beverages, tobacco, and sugar-sweetened items. These measures are intended to boost non-oil revenue and promote public health.
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Disbursement Conditions: To unlock an additional $10 million from the loan, the Nigerian government must issue a presidential order enacting these tax increases. Further disbursements are linked to the implementation of green taxes, including levies on heavy vehicles and a proposed 10% carbon tax on petroleum products.
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Current Progress: As of May 2025, Nigeria has received only $1.88 million of the approved $750 million. While six disbursement-linked results valued at $235 million have been achieved, they await formal verification.
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Broader Financial Context: This loan is part of a larger $2.25 billion package approved by the World Bank, which includes $1.5 billion aimed at supporting economic reforms and providing relief to those affected by subsidy removals and currency devaluation.
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Stakeholder Perspectives:
Economists acknowledge the necessity of increasing non-oil revenue but caution against the potential economic strain on citizens. Dr. Aliyu Ilias, CEO of CSA Advisory, emphasised the importance of balancing fiscal reforms with the country’s economic realities. Similarly, Dr. Paul Alaje of SPM Professionals highlighted the need for a cautious approach to avoid exacerbating the current economic challenges.
