Year: 2025
Type: article
Abstract: Nigeria stands at a critical fiscal crossroads, grappling with a complex debt structure, structurally weak revenue mobilisation, and rising development financing needs. This article advances a novel policy perspective centred on Nigeria's sovereign net worth as an anchor for sustainable public finance management and development-oriented borrowing. Drawing on global best practices, fiscal transparency frameworks, and balance sheet-based approaches, the article critiques Nigeria's evolving debt portfolio, particularly the shift from concessional to commercial financing, and assesses the macro-fiscal vulnerabilities it creates. It proposes a paradigm shift toward the National Financial Net Worth (NFNW) framework, which prioritises asset-backed borrowing, comprehensive balance sheet accounting, and capital budget ringfencing. Through this lens, innovative instruments such as GDP-linked bonds, climate-contingent debt, and infrastructure special purpose vehicles (SPVs) are explored as mechanisms to align fiscal expansion with long-term value creation. The article concludes by advocating for institutional reforms, particularly in fiscal transparency and asset valuation, and introduces a prototype Fiscal Sustainability Dashboard to track Nigeria's public sector net worth. Overall, the article provides a forward-looking, diagnostics-based approach to public finance in Nigeria, aimed at restoring fiscal credibility while unlocking transformational development outcomes.
Source: Economic Analysis Letters
DOI: 10.58567/eal04040002
Author: Sodik Olofin
Institution: Obafemi Awolowo University
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W4416099230