The Centre for the Promotion of Private Enterprise, CPPE, says the rising inflation and Naira depreciation have moderated the real value of the gains of fiscal and tax reforms in Nigeria.

CPPE Chief Executive Officer, Muda Yusuf, disclosed this in a statement on Sunday.

According to him, the two landmark policy measures -- the removal of fuel subsidy and the unification of exchange rates -- have significantly boosted government revenues, expanded fiscal space, and improved the capacity for public investment.

He noted that Nigeria has witnessed improved collections from Value Added Tax (VAT) and Company Income Tax (CIT), reflecting stronger compliance and a gradual recovery in economic activities.

Additionally, the economic think tank noted that subnational governments are reporting higher revenues and increased allocations to agriculture, infrastructure, and social development.

However, CPPE stressed that rising inflation, which stood at 21.12 percent in September, and currency depreciation (N1,455 per dollar on Friday) have moderated the real value of the gains of fiscal reforms in the past two years.

It further explained that Nigeria's budget of $36.7 billion has remained relatively small compared to South Africa ($141 billion), Algeria ($126 billion), and Egypt ($91 billion), which limits fiscal capacity for transformative investments in infrastructure, human capital, and social welfare for Nigerians.

Consequently, CPPE urged the federal government and subnationals to focus on priorities such as roads, power, ports, and digital infrastructure to reduce business costs and improve competitiveness.

"Measure Fiscal Gains Realistically: Adjust fiscal assessments for inflation and exchange rate effects; communicate outcomes transparently.

"Broaden and Diversify the Revenue Base: Improve tax efficiency, expand the tax net, and optimise non-tax revenues and national assets.

"Prioritise High-Impact Spending: Focus on infrastructure, food systems, productivity, and security.

"Strengthen Subnational Fiscal Capacity: Support fiscal autonomy, accountability, and efficient resource use in states.

"Implement Tax Reforms with Flexibility: Maintain continuous dialogue with stakeholders and refine policies as needed.

"Reinforce Fiscal Discipline: Ensure strict adherence to fiscal responsibility frameworks across all levels of government.

"Nigeria's fiscal and tax reforms have delivered important progress in expanding revenue and improving fiscal sustainability. The next phase must focus on deepening revenue diversification, enhancing spending efficiency, and aligning fiscal outcomes with real economic performance.

With prudent management, stakeholder collaboration, and social sensitivity, these reforms can lay a solid foundation for a more resilient, productive, and inclusive Nigerian economy.

Naira depreciation, inflation has reduced real value, gains of Nigeria's fiscal reforms - CPPE