Director of the Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development, Iyabo Masha, says Nigeria’s ongoing tax reforms are critical to building a modern, more efficient economy and securing long-term growth.

Masha, the first African to lead the influential G24 since its creation more than five decades ago, told journalists in Abuja that tax and domestic resource mobilisation must sit at the heart of any credible development strategy. She argued that Nigeria’s current reform drive, if sustained, could help formalise large parts of the economy, improve compliance and ultimately strengthen public finances.

“Tax and domestic resource mobilisation are fundamental to economic development,” she said, explaining that robust tax systems allow governments to fund infrastructure, education, healthcare and security without resorting excessively to debt. While countries can finance development through taxation, borrowing or selling public assets, she described taxation as the most efficient option and the least likely to trigger macroeconomic instability.

Masha highlighted the stark contrast between many developing economies and advanced countries in terms of tax capacity. Some low-income states, she noted, collect revenues equivalent to as little as seven per cent of their gross domestic product, compared with 25 to 30 per cent of GDP in better-performing peers. This gap, she warned, translates directly into weaker public services, underfunded infrastructure and limited resilience to shocks.

Drawing on her previous work on Nigeria’s fiscal system, Masha said she had found the country’s tax framework to be highly fragmented, with overlapping rules, multiple agencies and inconsistent enforcement. These weaknesses, she added, have contributed to chronically low revenue mobilisation despite the size and dynamism of Nigeria’s economy.

According to her, the current reforms aim to simplify the system, broaden the tax base and reduce leakages, while making it easier for businesses and individuals to comply. Over time, she said, a more coherent and predictable tax regime would not only raise revenue but also encourage investment, support job creation and help Nigeria shift away from its heavy dependence on oil.

Masha stressed that successful reform would require political will, strong institutions and clear communication with citizens, but insisted that the payoff could be transformative for Nigeria’s economic future.