The Nigerian government’s efforts to reduce its fiscal deficit have been hindered by low revenue generation. With a budget deficit of over 3.3 trillion naira in 2022, the country is struggling to meet its financial obligations. The government’s reliance on borrowing has increased, with a debt stock of over 42.8 trillion naira as of December 2022. To address this issue, the government needs to implement policies that boost revenue generation, such as increasing tax compliance and improving the business environment.
For instance, the government can reduce bureaucratic hurdles and offer incentives to investors, which can help increase foreign direct investment. By taking these measures, Nigeria can reduce its fiscal deficit and achieve economic stability.