“Over time, once the ongoing cost-of-living crisis abates and the cash transfer system is fully operational, there will be room to align tax rates with those in neighboring countries.

For now, the share of revenue that goes to interest spending leaves too little for investment in people and infrastructure. It is therefore critical that the substantial financial savings from the removal of fuel subsidies flow to the government to fund priority spending,” the report said.

It also hinted that Nigeria’s potential is beyond doubt but achieving it would require continued reforms and an effective social safety net to carry the most vulnerable along.