Nigeria shifts from oil dependency, focusing on tax revenue for economic recalibration
via Punch Nigeria2 hours ago6 min read
Nigeria is moving away from its long-standing reliance on crude oil, with tax revenue now accounting for approximately 87 percent of federation revenues, according to a new report by Quartus Economics. This marks a significant shift from the 2010-2013 period when oil contributed about three-quarters of government income. Tax receipts nearly tripled from N10.18 trillion in 2022 to N28.29 trillion in 2025, driven largely by non-oil sectors. This transition is seen as a crucial economic recalibration, moving from a rent-dependent fiscal model to a more diversified, tax-driven state. The country's historical overreliance on oil led to weak industrialization, high unemployment, and fiscal instability, as exposed by the 2014 oil price crash and the 2020 COVID-19 pandemic. Policy reforms, including improvements in tax administration and stricter enforcement of remittances, have contributed to rising revenues. Under President Bola Tinubu, the administration aims to boost the tax-to-GDP ratio to 18 percent by 2027. Despite rising revenues, public debt has expanded significantly, reaching 40 percent of GDP by 2025, with debt service consuming about half of revenues. Sustaining this transition requires broadening the tax base, particularly by integrating the informal sector, which accounts for half of Nigeria’s GDP. Addressing tax evasion, improving tax administration efficiency, and developing alternative revenue sources like strategic asset sales and the agricultural and solid mineral
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