_-Painful Policies Are Paying Off, Blames Elites for Tax Revolt_

 _-IJEBU State Creation: ‘A Waste of Resources’_

A Former Deputy Governor of the Central Bank of Nigeria, Dr. Tunde Lemo, has declared that Nigeria’s economy is gradually stabilising, insisting that the country is now “seeing light at the end of the tunnel” after a difficult reform year.

Speaking on Frontline, a current affairs programme on Eagle 102.5 FM, Ilese Ijebu, on Thursday, the veteran banker described the Nigerian economy as resilient, pointing to declining inflation figures, improved exchange rate stability, and easing food pressures toward the end of 2025.

“We thank God because we are beginning to see light at the end of the tunnel. The economy is resilient,” Lemo said.

He acknowledged that prices remain high but stressed that inflation has been trending downward, with both headline and food inflation consistently easing. According to him, December 2025 marked a turning point as Nigerians no longer had to queue for food, a development he attributed to the removal of fuel subsidy.

“For the first time in December, we didn’t need to queue up for food. Those who bought right will tell you prices were about 20 percent cheaper than the previous year,” he said.

Lemo maintained that the economic reforms introduced at President Bola Tinubu’s inauguration are already yielding dividends, despite the initial shocks.

“So you can see that the reform that Mr. President started with on his day of inauguration, we are already reaping the benefits. Yes, subsidy has been taken away, there were price spikes when that happened, but that has brought in sufficient product for us, so much so now that we don’t have to be running our taskers and looking for wealth. And then of course, prices are trending downwards.,” he added.

Inflation, Hardship and the Role of Government

While admitting that Nigerians are still under pressure, Lemo argued that stability is more important at this stage than quick relief. He urged fiscal authorities to complement the Central Bank’s tightening measures to ensure inflation does not resurge.

“When inflation continues to trend downwards, purchasing power will be enhanced,” he said.

He also called for targeted poverty interventions, stressing that government must focus on the very poor through conditional cash transfers and faster disbursement of student loans.

“There is nothing wrong with conditional cash transfers that go directly to the poorest of the poor to ameliorate their suffering,” he noted.

Interest Rates at 27 Percent: ‘CBN Must Watch the Trend’

On monetary policy, Lemo defended the Central Bank’s decision to maintain the Monetary Policy Rate at 27 percent despite declining inflation.

He explained that policy decisions cannot be based on a single month’s data.

“You cannot just amend policy or react to a reduction in inflation in one month. You have to ensure the trend is continuous,” he said.

However, he projected that relief may be imminent.

“With the continuous trend, I expect that by late January, when the MPC meets, we are likely to see them begin to bring down the monetary policy rate,” he stated.

Lemo stressed that the CBN must also protect exchange rate stability while adjusting interest rates.

New Tax Law: ‘Only in Nigeria Do People Want Services Without Paying Tax’

Lemo mounted a robust defence of the new tax regime, dismissing claims that the timing is wrong.

“When will it be the right time to pay tax? It is only in Nigeria that people do not want to pay tax but want government to provide everything,” he said.

He argued that taxation is essential to governance and warned against excessive borrowing or central bank financing, which fuels inflation.

“Government largely spends tax money in other climes. If we don’t pay tax, where do we expect funding to come from?” he asked.

Minimum Wage Earners, Traders and the Poor

Addressing widespread confusion, Lemo clarified that minimum wage earners will not be taxed under the new law after statutory reliefs are applied.

“Once reliefs like pension and housing are deducted, minimum wage earners will not pay tax,” he said.

He added that traders with annual turnover below ₦100 million are fully exempt.

“Would a woman selling pepper by the roadside make ₦100 million a year? The new tax law protects the poor more than the rich,” he stressed.

‘The Elites Are the Ones Fighting This Tax’

Lemo accused wealthy Nigerians of instigating public resistance to the tax reform.

“The elites are the most vocal. The poor don’t even have access to these conversations. The elites are using them as mouthpieces,” he said.

According to him, the reform targets tax evasion among the wealthy while shielding the vulnerable.

“The people affected are those who have been dodging taxes. The new tax protects the poor more than the rich,” he repeated.

Tax, Accountability and the Social Contract

While insisting that citizens must pay taxes, Lemo acknowledged concerns over corruption and misuse of public funds.

“Government must be transparent and accountable. Every kobo earned must be accounted for,” he said.

However, he rejected tax refusal as a protest tool.

“You must pay your tax first and stand on moral high ground before demanding accountability,” he argued.

Lemo urged Nigerians to hold leaders at all levels accountable, including local governments.

“How many of us have held our local government chairmen accountable?” he asked.

Fuel Subsidy Removal and Dangote Refinery

Responding to claims that the Dangote Refinery, not government policy, ended fuel scarcity, Lemo credited subsidy removal for making the refinery viable.

“If subsidy was not removed, Dangote would not have opened that refinery. The reform made it possible,” he said.

He warned that continued subsidy payments would have bankrupted the country.

“If subsidy had continued, Nigeria would have been bankrupt by now,” he stated.

Recapitalisation of Banks: ‘Absolutely Necessary’

Lemo defended the ongoing banking recapitalisation, recalling his role in the 2004–2006 exercise.

“If Nigeria is to become a $1 trillion economy, we need banks with robust capital,” he said.

He noted that the new capital thresholds merely reflect inflation-adjusted values of the earlier reform.

“This is a necessary reset to ensure banks remain agents of development,” he added.

The former CBN deputy governor welcomed the rise of fintechs, describing them as a natural outcome of technological advancement.

“Technology drives payment systems globally. Fintechs must come,” he said.

He stressed that regulation must ensure stability while encouraging innovation.

Road Tolls and Infrastructure Funding

Lemo strongly supported the return of tolling on major highways, arguing that it is economically rational.

“When the Lagos–Ibadan road was bad, you spent more fuel, more time, and more money. Paying tolls is cheaper in the long run,” he said.

He advocated concessioning roads to private operators for sustainable maintenance.

“Tolling should cover maintenance, lighting, security patrols, and emergency services. It is a total package,” he explained.

Politics and Possible Future Ambitions

Asked about political ambitions, Lemo confirmed consultations with stakeholders but declined specifics.

“There is the possibility that I may pick up opportunities to contribute more to the development of my state and the nation,” he said.

He confirmed his membership of the All Progressives Congress but avoided discussing discussions with sitting governors.

“If I say I’m consulting with all stakeholders, of course, you can guess who the stakeholders are. And anybody who guesses the stakeholders is possibly one of the people I’m consulting. So let us not get personal here. So long as I’ve made it clear that I am in consultation with most stakeholders, if not all. I think I should have said, you know, to prompt you that yes. There is that possibility that I could be talking to the governor or many other people apart from the governor. Okay. Let’s talk about some of the things you have seen and you think, oh, can be improved upon in the state. Well, you see, I don’t want to be misunderstood. One thing I know is that by next month, this state will be 50 years old. And looking back, I cannot but thank God for all the leaders that we have gotten.” He affirmed

IJEBU State Creation: ‘A Waste of Resources’

Even while acknowledging that Ogun State has historically not been favoured in past state creation exercises, Lemo noted that the state remains one of the few in Nigeria still comprising two old provinces.

He recalled that while provinces in other parts of the country were converted into separate states or even split further, Ogun State retained both the Abeokuta and Ijebu provinces under a single administrative structure. Citing examples from the North, he observed that Sokoto Province alone later produced multiple states, including Sokoto, Zamfara and Kebbi, while Ogun State remained intact. According to him, this disparity reflects political history rather than economic logic.

Shifting the argument to development economics, Lemo firmly rejected calls for further state creation, describing such agitations as wasteful and counterproductive.

He argued that constant balkanisation only expands recurrent expenditure and weakens development capacity.

“Even though, looking back, Ogun State has not been well treated on state creation. Because I remember, if you go back to 1960, and you see the provinces that we had there, Ogun State is about the only province, Ogun State is about the state that has two provinces in a state. In other places, each province has become a state.In some cases, even a province has been split into two. If you go to Sokoto for instance, we’ve seen Sokoto, we’ve seen Zamfara, we’ve seen Kendi. All carved out of Sokoto.All of that is one province. But today, we see two provinces, Abeokuta province and Ijebu province, still as part of Ogun State. I really don’t know why. But that is talking politics. Talking economics. Why should we be balkanizing ourselves more and more into different states? I don’t believe in that at all. It’s a waste of resources. California state today is almost half the size of Nigeria.”

Drawing international comparisons, he noted that California remains a single state despite being nearly half the size of Nigeria, while Nigeria itself is smaller than Alaska, which is also one state in the United States. “Development does not come from breaking ourselves into bits and pieces,” he said, urging policymakers to focus instead on harnessing resources, strengthening institutions and building capacity for sustainable growth.

He urged leaders to focus on harnessing resources rather than creating new states.

Religious Bodies and Taxation

Clarifying another contentious issue, Lemo said religious institutions are not taxed under the new law.

“Religious bodies do not pay tax. However, individuals working there who earn income must pay tax,” he explained.

‘The Rich Are Not Being Punished’

Lemo dismissed claims that the wealthy are being unfairly targeted. He argued that wealth thrives on law and order, which taxes help sustain.

“Paying 25 percent tax is not punitive. In some countries, people pay up to 40 percent,” he said.

“The rich need law and order more than the poor. Without it, businesses cannot operate,” he said.

Despite public scepticism, Lemo insisted that Nigeria’s current economic path, though painful, is unavoidable.

“These reforms are tough, but they are necessary. Without them, Nigeria would not survive,” he concluded.

Tax Revolt, Corruption Fears and Public Anger Dominate Callers’ Reactions

Public reactions to Dr. Tunde Lemo’s positions on tax reforms and economic policies revealed deep public scepticism, with callers expressing concerns about corruption, accountability and the burden of multiple taxes.

One caller, Wale Omooba, argued that corruption remains Nigeria’s core problem, insisting that increased taxation without visible impact would only worsen public distrust. He said citizens were more interested in seeing the dividends of taxation than hearing justifications for new levies.

Another caller from Ijebu questioned how the new tax regime benefits the poor, arguing that low-income Nigerians already pay multiple indirect taxes through banking charges, transportation levies, hospital fees and market tickets.

Responding, Lemo maintained that one of the objectives of the new tax law is to eliminate multiple taxation by harmonising levies under a single framework. He insisted that traders with annual turnover below ₦100 million and minimum wage earners remain protected.

A caller also credited the end of fuel scarcity solely to the Dangote Refinery, dismissing government reforms. Lemo countered this view, stating that subsidy removal made the refinery economically viable.

“If subsidy was not removed, Dangote would not have opened that refinery,” he said.

Another contributor, AB from Epe, argued that Nigerians are willing to pay taxes but demand transparency, accountability and tangible infrastructure in return. He called on government to demonstrate how tax revenues are spent.

Lemo agreed that accountability is essential but insisted that refusal to pay tax is not the solution.

“You must pay your tax first and then demand accountability. That is how you stand on moral high ground,” he said.

The programme ended with divided opinions from listeners, reflecting the broader national debate over reforms, taxation and governance, even as Lemo maintained that the policies, though painful, are unavoidable.

“These reforms are tough, but they are necessary. Without them, Nigeria would not survive,” he concluded.