Economy

Nigeria’s Tax Revenue to GDP Ratio Rises to 7%

Published

7 years ago

24/01/2019

By Modupe Gbadeyanka

For a while, the tax revenue to Gross Domestic Product (GDP) ratio of Nigeria had been at a paltry 6 percent, but this figure has risen now to 7 percent.

Minister of Finance, Mrs Zainab Ahmed, while speaking on Wednesday at a function in Abuja, disclosed that the tax to GDP ratio of Africa’s largest economy was presently at 7 percent.

However, she said this figure was still low, challenging revenue generation agencies in the country to brace up and broaden the non-revenue base of government.

Mrs Ahmed, who spoke at the unveiling of federal government’s Strategic Revenue Growth Initiatives (SRGI) for sustainable revenue generation in all sectors of the economy, noted that government plans to achieve “sustainability revenue generation to optimally collect revenues, so we always maintain fiscal buoyancy and resilience.”

She said thereafter, government will identify new revenue streams and enhance the enforcement with regards to revenue collection on our existing revenue streams.

According, when the above is achieved, another move would be to create a “cohesion between revenue generating entities and equipping them with cutting-edge tools and expertise needed to support high performance, so we can turnaround our current performance on revenue outturn to meet revenue targets that we are charged with.”

“The revenue initiatives have been broken into clear implementable portfolios for each relevant MDA and I believe that these are well thought out initiatives targeted at improving our tax base and collections, ensuring we have big data to work with, deploy a single trade platform, among many others,” Mrs Ahmed said.

She further that, “We have faced difficulty in mobilising domestic funds necessary for human capital development and infrastructure that are both drivers of sustainable economic growth.

“Our current revenue to GDP ratio of about seven percent is unsatisfactory and we are keen on exerting all efforts in turning this around.

“The case remains the same with our current contribution between oil and non-oil revenues to oil and non-oil GDP, for which our analysis on oil revenue to oil GDP reveals as 39 percent while non-oil revenue to non-oil GDP as 4.2 percent.

“Our VAT revenue to GDP in Nigeria for example stands at 0.8 percent, which compares unfavourably to the ECOWAS average of 3.4 percent. So also, is our excise revenue which is 4.1 percent, compared to Ghana at 15 percent or Kenya at 19.5 percent.”

Last year, Executive Secretary of the Federal Inland Revenue Service (FIRS), Mr Babatunde Fowler, had said his agency would make efforts to increase the national tax revenue to GDP ratio to at least 20 percent by December 31, 2018.

However, with the latest information by his boss, the Finance Minister, this target was never met by the tax agency.

“Revenue authorities nationwide should ensure that all efforts are made to increase the national tax revenue to the Gross Domestic Product ratio to at least 20 percent by December 31, 2018,” FIRS had said in a communiqué issued last September.

Business Post reports that some Nigerians still find it difficult to pay tax to government because of issue of transparency on the part of government. Citizens provide virtually every basic things for themselves, including water, electricity, shelter, food, sometimes roads and others.

Though the number of people in the tax net is increasing by the day, a lot of taxpayers still have to be captured by government. At the moment, the tax base is nearly 20 million in a population of nearly 200 million.

Economy

NGX All-Share Index Nears 150,000 Points After 0.26% Growth

Published

5 minutes ago

18/12/2025

Dipo Olowookere

By Dipo Olowookere

A 0.26 per cent growth was achieved by the Nigerian Exchange (NGX) Limited on Wednesday on the back of sustained bargain-hunting by investors.

This happened despite a pocket of profit-taking, with industrial goods losing 0.63 per cent and the energy index shedding 0.05 per cent.

But the insurance space increased by 2.02 per cent, the banking counter appreciated by 1.48 per cent, the commodity sector improved by 0.48 per cent, and the consumer goods segment rose by 0.03 per cent.

Consequently, the All-Share Index (ASI) went up by 383.71 points to 149,842.82 points from 149,459.11 points and the market capitalisation jumped by N244 billion to N95.525 trillion from N95.281 trillion.

The market breadth index remained positive after the bourse finished with 38 price gainers and 23 price losers, indicating a strong investor sentiment.

The quartet of First Holdco, Lasaco Assurance, Veritas Kapital, and Prestige Assurance gained 10.00 per cent to quote at N39.60, N2.75, N1.76, and N1.65, respectively, while Mecure Industries grew by 9.92 per cent to N50.40.

Conversely, Living Trust Mortgage Bank lost 10.00 per cent to close at N3.15, International Energy Insurance dropped 9.92 per cent to trade at N2.27, McNichols shrank by 6.90 per cent to N2.97, Omatek decreased by 6.84 per cent to N1.09, and Chams dipped by 6.41 per cent to N2.92.

The activity level witnessed a significant surge at midweek, with Ecobank trading 5.3 billion units for N168.7 billion.

Further, First Holdco sold 108.2 million units worth N4.2 billion, Sterling Holdings exchanged 87.3 million units valued at N606.2 million, FCMB transacted 74.3 million units worth N783.6 million, and Access Holdings sold 41.5 million units for N841.4 million.

At the close of trades, market participants traded 5.9 billion units valued at N216.2 billion in 25,205 deals compared with the 1.0 billion units worth N21.8 billion traded in 23,701 deals a day earlier, showing a rise in the trading volume, value, and number of deals by 490.00 per cent, 891.74 per cent, and 6.35 per cent, respectively.

Economy

Naira Loses 0.25% to Trade N1,455 at Official Market

Published

7 minutes ago

18/12/2025

Adedapo Adesanya

By Adedapo Adesanya

The Naira depreciated against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Wednesday, December 17, by N3.67 or 0.25 per cent, closing at N1,455.49/$1, in contrast to Tuesday’s closing price of N1,451.82/$1.

Also, the local currency weakened against the Euro in the official market at midweek by 98 Kobo to close at N1,706.72/€1 versus the previous session’s price of N1,705.74/€1, but improved against the Pound Sterling by 75 Kobo to trade at N1,943.28/£1 compared with the N1,943.98/£1 it traded a day earlier.

At the GTBank forex counter, the Nigerian currency lost N3 against the greenback to finish at N1,463/$1 versus N1,460/$1 and in the parallel market, it remained unchanged at N1,475/$1.

Thin US dollar inflows from exporters, non-bank corporate, foreign portfolio investors and absence of immediate intervention of the Central Bank of Nigeria (CBN) to strengthen supply triggered fresh pressure.

This is coming off the back of decline in inflows through the Nigerian Foreign Exchange Market which decreased to $716.3 million last week from $844.70 million in the previous week , a 15 per cent drop in a week.

The intervention comes as the CBN expect inflows from Detty December to alleviate need for FX demand, but exorbitant local prices may be keeping spending at bay.

Regardless of the seasonal demand, positive FX support for the local currency through 2025 signals a deliberate action to ensure the local currency maintains the trading range amidst growing external reserves. Latest data showed that gross external reserves position advanced to $45.47 billion, reflecting a 11.2 per cent Year-to-Date (YTD) gain.

In the cryptocurrency market, there was selling pressure as traders liquidated positions amid a short-rally, leading Litecoin (LTC) to slip by 5.2 per cent to close at $75.12m, as Cardano (ADA) depreciated by 5.0 per cent to $0.3619, and Dogecoin (DOGE) lost 4.8 per cent to finish at $0.1247.

In addition, Ripple (XRP) depreciated by 4.7 per cent to $1.83, Solana (SOL) crashed by 4.1 per cent to $122.62, Ethereum (ETH) went down by 3.9 per cent to $2,826.62, Binance Coin (BNB) fell by 3.4 per cent to $833.07, and Bitcoin (BTC) tumbled by 0.5 per cent to sell at $86,436.66, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.

Economy

Crude Oil Prices Jump 1% as Trump Orders Venezuela Tankers Blockade

Published

1 hour ago

18/12/2025

Adedapo Adesanya

By Adedapo Adesanya

Crude oil prices rallied by more than 1 per cent on Wednesday after the United States President, Mr Donald Trump, ordered a blockade of all oil tankers under sanctions entering and leaving Venezuela.

Brent crude settled at $59.68 a barrel after chalking up 76 cents or 1.3 per cent, while the US West Texas Intermediate (WTI) crude traded at $55.94 a barrel, up 67 cents or 1.2 per cent.

Mr Trump ordered a blockade of sanctioned tankers heading to or departing from Venezuela, the latest move to increase pressure on Nicolas Maduro’s government, targeting its main source of income.

At least 34 US-sanctioned oil tankers with a history of carrying Venezuelan oil are currently at sea in the Caribbean.

Oil market participants said prices were rising in anticipation of a potential reduction in Venezuelan exports, although they were still waiting to see how Trump’s blockade would be enforced and whether it would extend to include non-sanctioned vessels.

The country, which is a member of the Organisation of the Petroleum Exporting Countries (OPEC), has produced around 900,000 barrels of crude oil and condensate so far in 2025, accounting for roughly 1 per cent of the total global supply.

Venezuela could lose up to 500,000 barrels per day of its oil production, according to Reuters estimates. China is the biggest buyer of Venezuelan crude, which accounts for roughly 4 per cent of its imports, with shipments in December on track to average more than 600,000 barrels per day.

While many vessels picking up oil in Venezuela are under sanctions, others transporting the country’s oil and crude by way of Iran and Russia have not been sanctioned.

Crude oil inventories in the US decreased by 1.3 million barrels during the week ending December 12, after losing 1.8 million barrels in the week prior, according to new data from the U.S. Energy Information Administration (EIA) released on Wednesday.

The EIA’s data release follows figures by the American Petroleum Institute (API) that were released a day earlier, which suggested that crude oil inventories fell by a massive 9.2 million barrels.

For total motor gasoline (petrol), the EIA reported that inventories had increased by 4.8 million barrels, on top of the 6.4 million barrel gain in the week prior. For middle distillates, inventories increased by 1.7 million barrels, with production easing by 228,000 barrels daily to an average of 5.2 million barrels daily.