Economy
Nigeria’s Revenue to GDP Ratio Hits 8%, Targets 15% 2023
By Dipo Olowookere
Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, has said at the moment, the revenue to Gross Domestic Product (GDP) of Nigeria stands at 8 percent, promising to increase this ratio to 15 percent by the end of the present administration of President Muhammadu Buhari in 2023.
Mrs Ahmed made this disclosure on Thursday at the International Monetary Fund (IMF)/World Bank annual meeting in Washington DC, in the United States of America (USA).
During her remarks, the Minister said part of ways to meet this target is to increase the revenue streams of the country by introducing taxes and expanding the present tax base.
She said it was necessary for the country, which is Africa’s largest economy, to move away from relying solely on crude oil to generate revenue.
According to her, Nigeria’s economy is too dependent on the oil and gas sector, which accounts for just about 10 percent of GDP and represents 94 percent of export earnings and 62 percent of both federal and state governments’ revenues in 2011-2015. She said the country went into recession because the sector suffered shortfall, which dragged the foreign exchange reserves down to $25 billion in November 2016 from $32 billion in January 2015 from a high of $53 billion in 2008.
The Minister said it was because of this economic crisis government came up with the Economic Recovery and Growth Plan (ERGP) in 2017 to diversify the economy and create an enabling business environment.
She noted that since the launch of the 4-year ERGP, “We have recorded year on year improvement on both revenue outturns and revenue to GDP ratio.
“Our revenue outturn as at December 2019 55 percent while it was 58 percent as at June 2019. Our revenue to GDP ratio on the other hand is 8 percent as at end of June 2019 while it was 5 percent as at December 2017.”
According to her, based on the success made so far, the federal government in 2018 launched the Strategic Revenue Growth Initiatives (SRGI), which provides a turnaround blueprint and mechanism that brings together revenue generating entities to review implementation progress.
The Minister said the SRGI was built on three thematic areas including: (1) to achieve sustainability in revenue generation (2) identify new and enforce existing revenue streams and (3) achieve cohesion through people and tools.
She said the initiative includes some cross-cutting enablers including data and technology, performance management and enabling laws and legislations.
“Although, the SRGI contained a robust set of initiatives that was cascaded down as program portfolios to revenue generating entities, it lacked the opportunity sizing of the incremental revenues to be achieved
practically and realistically, given the current and projected structure of the Nigerian economy. This also made it difficult to in turn cascade down the revenue to GDP target of 15 percent by 2023 that was given by the presidency.
“This time around, there are performance targets with consequences for non-performance including the members of the cabinet. For example, I have signed to deliver the 15 percent revenue to GDP in a performance contract and this will be cascaded down to Heads of revenue generating entities to have them aligned to our mission of turning around revenues,” Mrs Ahmed said.
The Minister assured that government will continue to build on the gradual growth in economy, which has recorded nine consecutive quarters of GDP increase, with the annual growth rising from 0.82 percent in 2017 to 1.93 percent in 2018, and 2.02 percent in the first half of 2019.
She attributed this to “our economy’s resilience and gives credence to the effectiveness of our economic policies thus far.”
“We also succeeded in significantly reducing inflation from a peak of 18.72 percent in January 2017, to 11.02 percent by August 2019. This was achieved through effective fiscal and monetary policy coordination, exchange rate stability and sensible management of our foreign exchange.
“We have sustained accretion to our external reserves, which have risen from $23 billion in October 2016 to about $42.5 billion by August 2019,” she added.
By Adedapo Adesanya
The National Pension Commission (PenCom) has defended its decision to allow Pension Fund Administrators (PFAs) to invest in the parent companies of their custodians, insisting that adequate safeguards are in place to protect contributors’ funds.
The director-general of the pension regulator, Ms Omolola Oloworaran, speaking on Tuesday during the Meet the Press Briefing at the Presidential Villa, Abuja, said the commission’s decision to relax the investment restriction followed a comprehensive risk assessment that found minimal conflict of interest.
She explained that under PenCom’s investment regulations, PFAs are only permitted to invest pension assets in carefully selected instruments that meet stringent criteria, including profitability, strong credit ratings and proven track records.
According to her, the commission regularly reviews its investment regulations, conducts routine examinations and spot checks on PFAs to ensure strict compliance with established risk management guidelines.
“PFAs cannot just go into the stock market and buy any kind of stock. There are strict guidelines. Companies must demonstrate profitability, have a proven track record and satisfy other criteria before pension funds can invest,” she said.
Ms Oloworaran noted that each PFA also operates under the oversight of a board, an investment committee and a risk management committee, providing additional layers of governance to safeguard contributors’ funds.
She said PenCom recently issued a circular allowing PFAs to invest in the parent companies of their custodians after determining that the potential conflict of interest was negligible.
The PenCom boss explained that the parent companies involved are largely Tier-1 banks, including First Bank, United Bank for Africa (UBA) and Zenith Bank, which she described as A-rated institutions with strong financial foundations.
She said the policy was intended to widen investment opportunities for pension funds without compromising safety.
Using Stanbic IBTC as an example, Ms Oloworaran explained that if its custodian is Zenith Bank, the previous restriction prevented the pension administrator from investing in Zenith Bank shares despite the bank’s strong performance.
“We reviewed the risks and any potential conflict of interest and found the risks to be very low. That is why we opened that investment window,” she said.
By Aduragbemi Omiyale
Analysts at Meristem Research have predicted that the inflation rate for June 2026 in Nigeria should marginally rise to 15.95 per cent on a year-on-year basis from the 15.93 per cent reported in May 2026.
The National Bureau of Statistics (NBS) is expected to release inflation numbers for last month later today, Wednesday, July 15, 2026.
In its report sighted by Business Post, Meristem Research said it expects inflationary pressures to re-emerge across key economies in the near term, as the re-escalation of the US-Iran conflict has reignited upward pressure on global oil prices.
It disclosed that this marks a sharp reversal from most of June, when the ceasefire between the two countries helped drive oil prices lower, raising expectations of some relief on the inflation front.
With conflicts now flaring up again, oil prices are likely to increase again, and the anticipated easing in energy-driven inflation may not materialise as broadly as earlier envisaged.
“Nonetheless, some relief is likely from the food segment, where robust supply conditions across major producing regions and softening demand should continue to ease food price pressures,” it stated.
The team also explained that it projected a 15.95 per cent inflation rate because of the lingering effects of persistent food price pressures.
“However, we expect core inflation to moderate as the sharp reversal in energy prices begins to filter through to transportation, distribution, and other energy-related costs, easing underlying price pressures.
“On a month-on-month basis, the combined effect of lower petrol prices, a relatively stable Naira, and the gradual pass-through of reduced energy costs across the supply chain should exert further downward pressure on inflation.
“Based on our assessment, food inflation is expected to remain the key swing factor, as seasonal pre-harvest supply constraints are likely to offset some of the gains from lower logistics costs,” it said.
By Adedapo Adesanya
The duo of Central Securities Clearing System (CSCS) Plc and Afriland Properties Plc weakened the NASD Over-the-Counter (OTC) Securities Exchange by 1.61 per cent on Tuesday, July 14.
CSCS Plc saw its stock value drop N9.08 to close at N82.40 per share compared with the preceding session’s N91.48 per share, and Afriland Properties Plc slid by 17 Kobo to sell at N15.00 per unit versus N15.70 per unit.
The losses recorded by the two securities pulled back the market capitalisation by N41.64 billion to N2.546 trillion from N2.587 trillion, and cracked the NASD Security Index (NSI) by 69.36 points to 4,242.31 points from 4,311.67 points.
It was observed that the exchange witnessed two price advancers during the session, led by FrieslandCampina Wamco Nigeria Plc, which gained N1.37 to end at N151.37 per share compared with the previous day’s N150.00 per share, and Food Concepts Plc chalked up 5 Kobo to settle at N2.50 per unit versus N2.45 per unit.
The volume of securities traded by market participants surged by 50.7 per cent to 13.7 million units from the previous 9.1 million units, while the value of securities went down by 79.7 per cent to N65.2 million from N320.4 million, and the number of deals crashed by 3.6 per cent to 27 deals from the previous session’s 28 deals.
At the close of transactions, Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with the sale of 3.4 billion units for N8.4 billion, trailed by Infrastructure Credit Guarantee (Infracredit) Plc, which exchanged 2.3 billion units valued at N6.5 billion, and CSCS Plc with 73.9 million units transacted for N5.2 billion.
GNI Plc also closed the trading day as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units valued at N415.7 million.
