Tax Reforms to Modernize and Boost Economy, Says G24 Head

The Role of Tax Reforms in Nigeria’s Economic Transition

The Director of the Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development, Iyabo Masha, recently highlighted the importance of tax reforms in supporting Nigeria’s transition into a modern and efficient economy. This was discussed during the G-24 2026 Technical Group Meeting, scheduled to be held in Abuja from 18 to 20 February. Masha, who is the first African to hold this position since the establishment of the G-24 over five decades ago, addressed a press conference in Abuja ahead of the meeting.

The event, themed “Mobilising Finance to Promote Sustainable, Inclusive, and Job-Rich Economic Transformation,” aimed to focus on key issues affecting developing economies. Masha emphasized that tax and domestic resource mobilisation are central to development, stating that these mechanisms can deepen formalisation and strengthen public finances over time.

She explained that taxation enables governments to provide essential services such as infrastructure, education, and healthcare while maintaining law and order. According to Masha, taxation is the most efficient method for financing development compared to borrowing or asset sales, as it leads to the least macroeconomic destabilisation.

Challenges in Tax Mobilisation

Masha pointed out that developing countries often face challenges in tax mobilisation, with some recording rates as low as seven per cent of GDP, compared to others that generate 25 to 30 per cent of GDP. She noted that countries with higher tax-to-GDP ratios tend to have more stable and sustainable economic growth.

In discussing Nigeria’s reforms, Masha mentioned that she had previously examined the country’s tax framework and found it to be “very fragmented.” She stated that the new tax policy aims to address these issues by bringing more companies into the tax net and adjusting taxation rates accordingly. Certain capital taxation measures were described as “very interesting” and could incentivise more efficient production.

While acknowledging that reforms may be painful initially, Masha stressed that they would yield long-term gains, allowing the Nigerian economy to transition into a real modern economy that meets the aspirations of its people. She also noted that reforms could encourage more firms to formalise operations and potentially expand employment.

Background of the G-24

The G-24, founded during a turbulent period in global economics, was established to represent the largest economies in the Global South. It serves as a voice for these countries when negotiating and discussing issues with advanced economies. Masha highlighted exchange-rate spillovers as a key concern, noting that the world is heavily influenced by the US dollar.

Developing countries often rely on external financing from institutions like the IMF and World Bank due to underdeveloped domestic capital markets. The G-24, which has 29 member countries and several observers, including multilateral institutions, is headquartered in Washington, DC. It holds ministerial-level meetings twice yearly on the sidelines of the IMF and World Bank meetings.

Key Topics at the G-24 Meeting

The upcoming Technical Group Meeting will allow members to align positions ahead of those engagements. Nigeria is the chair country for this year, with about 45 delegates confirmed to attend, and additional participation expected from relevant Nigerian agencies. The meeting is being hosted by the Ministry of Finance and the Central Bank of Nigeria.

The programme will feature five panels, including one marking 80 years of the Bretton Woods institutions, which will assess achievements and future reforms of the IMF and World Bank. Another panel will examine digital services taxation and domestic resource mobilisation, focusing on how governments can better tax global technology firms.

Climate change and energy transition will also be a key topic, with Masha noting the complex balancing act faced by oil-exporting developing countries. Other sessions will focus on financial inclusion, monetary stability, regional trade, and integration.

Regional Cooperation and Debt Sustainability

Masha highlighted the importance of regional cooperation in West Africa despite political tensions. She argued that stronger regional trade could allow local producers to meet demand. Regarding debt sustainability, she acknowledged rising debt-servicing pressures, especially since the pandemic, but pointed to the G20-backed Common Framework for restructuring.

She urged countries to manage their debt in a sustainable way to avoid fiscal strain. On artificial intelligence and digital transformation, Masha warned against widening inequality between advanced and developing countries and called for global agreements on data protocols, privacy rights, and intergovernmental cooperation.

The G-24 and Its Members

The Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development brings together developing and emerging economies across Africa, Asia, Latin America, and the Caribbean. Member countries include Nigeria, South Africa, Ethiopia, and the Ivory Coast from Africa; India, Pakistan, Sri Lanka, and the Philippines from Asia; and Brazil, Argentina, Colombia, Peru, Guatemala, and Mexico from Latin America and the Caribbean.

Currently, the bloc has 29 member countries that coordinate positions on global monetary, financial, and development issues.