Minister of Budget and Economic Planning, Abubakar Bagudu, has acknowledged that the removal of petrol subsidy and foreign exchange reforms triggered significant economic turbulence and intensified hardship for Nigerians, but said the measures had also expanded the fiscal capacity of the three tiers of government.

Bagudu, however, stressed that higher revenues alone would not amount to economic transformation, insisting that states and local governments must deploy their increased resources to productive activities capable of expanding economic output.

The minister spoke at the Federal Appointees Strategic Summit on the presentation and review of ministerial and Ministries, Departments and Agencies (MDAs) budget implementation.

He challenged government officials to demonstrate measurable results from the administration’s reform programme as the Federal Government seeks to move the economy beyond fiscal stabilisation towards faster growth.

The administration’s ambition to grow Nigeria’s economy to $1 trillion by 2030 has emerged as a major benchmark for the success of its economic programme.

Bagudu said the government did not fully anticipate the scale of the economic turbulence that followed the reforms, which was compounded by global uncertainties, geopolitical conflicts, food-price pressures and disruptions to international trade.

He, however, argued that the increase in revenues available to the Federal Government, states and local governments represented an important structural change in Nigeria’s public finances.

“Rather than keeping additional revenues at the centre, the President has taken the position that we should give local governments and states more money and energise everyone so that we can interrogate and fulfil our responsibilities,” he said.

The minister’s position effectively places greater responsibility on states and local governments to convert stronger federation allocations into economic activity and improved public services.

Bagudu said the additional fiscal resources should translate into better infrastructure, education, security, productive investments and public services.

He recalled periods when some states struggled to pay salaries despite relatively high international oil prices, leaving governments with limited resources for infrastructure and other development priorities.

He also cited Federal Government interventions aimed at addressing outstanding financial obligations to states, saying the measures were intended to strengthen the fiscal capacity of the federation.

With the administration targeting a $1 trillion economy by 2030, however, Bagudu said the key challenge was to ensure that increased fiscal space translated into higher productivity and private-sector investment rather than simply larger government spending.

He said improvements in some economic indicators, including the revenue-to-GDP ratio, suggested that the reforms were strengthening Nigeria’s fiscal foundations.

The minister also defended the administration’s tax reforms, saying they were designed to improve the efficiency of revenue collection rather than unnecessarily increase the burden on citizens.

He warned, however, against treating emerging fiscal gains as the end of the reform process.

According to him, President Bola Tinubu has repeatedly challenged members of his administration to ensure that reforms ultimately produce tangible benefits for Nigerians.

Bagudu said the $1 trillion economy target was ambitious but achievable if key elements of the National Development Plan were effectively implemented.

He stressed that economic expansion must be inclusive, create opportunities, reduce poverty and improve living standards.

The minister said the National Economic Council had increasingly focused on encouraging states to expand domestic production and build stronger productive economies.

He argued that increased allocations would have limited impact if governments failed to invest in activities capable of increasing output, creating jobs and generating sustainable economic opportunities.