The Minister of Budget and National Planning, Abubakar Bagudu, has revealed that Saudi Arabia is fully supportive of President Bola Tinubu’s economic reforms, which have been described as “unusual” in addressing the nation’s economic challenges.
Bagudu highlighted that Saudi Arabia’s Value Added Tax stands at 15%, underscoring the tough choices both nations have made to improve their economies.
The minister made the comments after a meeting with President Tinubu in Lagos on Sunday, where he briefed the press on the positive reception Saudi Arabia has given to Nigeria’s economic strategies. Bagudu noted that the Saudi government sees in President Tinubu a leader committed to transforming Nigeria, similar to how Saudi Arabia underwent its own significant economic changes under Crown Prince Mohammed bin Salman.
Bagudu drew a parallel between the reform efforts of Tinubu and those of Crown Prince Mohammed bin Salman, who introduced controversial measures, such as the removal of oil subsidies and the implementation of VAT, to tackle Saudi Arabia’s economic challenges. He pointed out that during his recent visit to Saudi Arabia, he noticed a 15% VAT charge on goods and services. However, despite the challenges posed by such reforms, Saudi Arabia has seen a remarkable economic transformation, attracting substantial investment.
The minister emphasized that Saudi Arabia recognizes Tinubu’s bold and risky decisions, which are seen as essential for the long-term growth of Nigeria. He believes that the relationship between Nigeria and Saudi Arabia will flourish, leading to increased economic ties and improvements in Nigeria’s financial reserves.
Looking ahead to Nigeria’s economic prospects in 2025, Bagudu expressed optimism, noting that the country has made the tough decisions needed to overcome its challenges. He predicted a better economy, with lower inflation, increased employment opportunities, and more support for businesses. He also highlighted plans for enhanced infrastructure development, improved security funding, and growth in sectors like education and healthcare. Bagudu assured that these efforts would lead to a higher quality of life for Nigerians in the coming years.
“He came as a leader and he said, well, you might be rich, you might be entitled, but our economy is not passing the right direction. So, he introduced reform measures, which were unusual then in Saudi Arabia: removal of oil subsidies and introduction of VAT legislation, among others.
“I have a receipt here; when I ate food, I noticed that the VAT was 15 per cent. But today, Saudi Arabia is turning into a wonderland, an amazement in investment; money is flowing,” said Mr Bagudu.
According to him, the Saudis appreciate Mr Tinubu’s harsh economic reforms.
“You can see clear confirmation that they want to stand by this leader because he has taken risks that are unusual and they celebrate his courage and capacity.
“For me, that is the number one achievement for our country. The relationship will blossom such that our reserves and our economic ties will improve with the kingdom,” Mr Bagudu explained.
“So, what we expect to see in 2025 is a better economy, lower inflation, more employment opportunities, more support for businesses, more infrastructure development.
“We also expect more funding for security and better security, and all those priority areas: human capital development, education, health. We’re sure to see more in that direction, and the quality of life will get better,” he added.
