Nigeria’s non-oil sector has continued to demonstrate resilience, driving the nation’s tax revenue to a historic ₦17.4 trillion in 2024, according to the Federal Inland Revenue Service (FIRS).
This performance marks a significant shift in Nigeria’s revenue profile, as non-oil activities increasingly outpace crude oil earnings in supporting government finances.
The latest figures, released in Abuja, show that revenue from non-oil sources such as telecommunications, banking, manufacturing, and services contributed more than 60 percent of total tax collections.
This is a clear indication that Nigeria’s economy is gradually diversifying away from its heavy dependence on crude oil, a sector long vulnerable to global price volatility.
The FIRS report noted that while oil-related taxes brought in around ₦6.5 trillion, non-oil taxes accounted for over ₦10.9 trillion. Key contributors include:
Value Added Tax (VAT): ₦3.8 trillion, driven largely by consumer spending and expansion of digital platforms.
Company Income Tax (CIT): ₦4.1 trillion, with the financial and manufacturing sectors leading the pack.
Customs and Excise Duties: ₦1.5 trillion, reflecting stronger trade volumes despite global shipping constraints.
Other non-oil revenues: Including stamp duties and electronic money transfer levies, adding over ₦1.5 trillion.
The numbers represent a robust increase compared to 2023, when total tax revenue stood at ₦14.3 trillion.
For decades, Nigeria has relied on crude oil sales for as much as 70 percent of government revenue. However, the recent performance of the non-oil sector reflects deliberate policy shifts aimed at broadening the country’s tax base.
Experts point to reforms such as:
The digitalisation of tax administration, which has made compliance easier.
Expansion of VAT to capture more goods and services in the digital economy.
Increased efficiency in monitoring multinational corporations, particularly in telecommunications, finance, and consumer goods.
“Non-oil revenues are becoming the backbone of Nigeria’s fiscal stability,” said Dr. Tunde Olalekan, an economist at the University of Lagos.
“This trend reduces Nigeria’s vulnerability to oil shocks and provides a more predictable stream of revenue for budget planning.”
The ₦17.4 trillion tax haul is expected to boost the federal government’s ability to fund critical infrastructure projects, social welfare programmes, and debt servicing.
With Nigeria’s public debt standing at over ₦97 trillion, steady non-oil revenue growth is seen as essential for sustainability.
The Ministry of Finance has pledged that a significant portion of the revenue will go towards road construction, power projects, and healthcare funding, while also supporting social interventions to cushion the effects of subsidy removal.
Despite the impressive numbers, analysts caution that Nigeria still faces hurdles in sustaining the momentum. These include:
Tax Compliance Gaps: A large portion of small and medium enterprises (SMEs) still operate outside the tax net.
Informal Economy: Over 50 percent of Nigeria’s workforce is in the informal sector, making effective taxation difficult.
Policy Consistency: Businesses often complain about frequent regulatory changes, which can discourage investment.
The International Monetary Fund (IMF) has repeatedly advised Nigeria to raise its tax-to-GDP ratio, which currently stands at about 10 percent, far below the African average of 16 percent.
Industry stakeholders have welcomed the growth in non-oil tax revenue, but warn that over-taxation could stifle business growth.
The Manufacturers Association of Nigeria (MAN) noted that while its members contributed significantly to tax collections, rising energy costs, multiple levies, and high interest rates continue to weigh heavily on their operations.
They called for better utilisation of tax revenues to improve infrastructure and reduce the cost of doing business.
With the economy diversifying and tax reforms gaining traction, Nigeria appears to be charting a new fiscal course.
The strong non-oil revenue performance sends a positive signal to international investors and credit rating agencies, which have often flagged Nigeria’s oil dependence as a risk factor.
As the federal government prepares the 2025 budget, analysts say sustaining the momentum will depend on deepening digital tax collection, expanding the formal economy, and ensuring transparency in the use of public funds.
Nigeria’s record ₦17.4 trillion in tax revenue underscores the growing importance of the non-oil sector in driving economic resilience.
While challenges remain, the shift signals a long-awaited diversification that could secure fiscal stability for Africa’s largest economy.