Economy
Why the Nigerian Economy Requires Immediate Reforms
Not too long ago, Bola Ahmed Tinubu won the presidential election. He will take over the presidency of Nigeria in May 2023 and will have the difficult challenge of reviving the weak Nigerian economy by implementing many crucial changes.
GDP Growth Rate
The National Bureau of Statistics’ latest data on Nigeria’s Gross Domestic Product (GDP) shows a decrease in the annual GDP growth rate to 3.10% in 2022, compared to 3.40% in 2021. However, in the 4th quarter of 2022, the economy grew by 3.52%, in contrast to the 2.25% in the previous quarter.
Non-oil sectors were responsible for most of the growth. More precisely, 95.66%, while Nigeria’s oil sector contributed 4.34%. Daily oil production increased to 1.34 million barrels per day in Q4, up from the previous quarter’s 1.20 million barrels. However, it is still lower than the 1.50 million barrels per day recorded in the same quarter of 2021.
The services sector was also one of the main reasons for growth, contributing 56.27% to the GDP in the 4th quarter of the year.
Furthermore, the information and communication sector also played a significant role. It caused a 16.22% growth in the 4th quarter, compared to 15.35% in the 3rd quarter and 15.21% in the 4th quarter of 2021.
Another sector that helped with the GDP growth was the trade sector. It added 13.20% to the GDP in Q4, higher than the 12.45% in Q3. Although the sectors mentioned above had a positive effect on the GDP, there are still some sectors that lowered it.
Agriculture’s contribution to the GDP in the 4th quarter was 24.90%, a bit lower than the previous quarter’s 27.55%. Severe flooding across the country significantly set back agriculture, causing the sector to record a 0.94% decrease.
Manufacturing’s contribution to real GDP in 2022 was 8.40%, lower than 15% in 2021. So, the new president can work on expanding labour productivity through education to improve the country’s GDP.
Socio-Economic Issues
Mrs Zainab Ahmed, the Minister of Finance, Budget, and National Planning, mainly worries about the government’s ability to fund important programs due to low tax compliance among Nigerians. In the past, citizens paid taxes, but this changed since Nigeria became an oil-based economy. But, perhaps quite surprisingly, Nigeria’s gambling industry could provide a good source of revenue as it is relatively advanced compared to other African countries.
In general, governments tax the gambling industry to generate revenue, which also applies to Nigeria. However, with the online gambling world remaining largely unregulated in Nigeria (as well as in the vast majority of African countries), Nigeria is missing out on a significant potential source of income, not to mention that Nigerian citizens gambling online remain primarily unprotected due to the lack of regulation in the country.
With no deposit bonuses and other enticing offers brought about by the rise of online gambling attracting more and more players each year, it’s crucial to address the problem of the lack of legislation in this sector – for both players’ and the country’s sake.
And although tax collection has increased significantly from N6 trillion in 2021 to N10 trillion in 2022, the government still needs to address the growing expenditure that outpaces revenue growth by almost double annually.
Improving the Transmission Infrastructure
Power transmission is a huge issue for Nigerian citizens. Despite installing almost 13 GW of grid power-producing capacity, only an average of 3.4 GW reaches customers.
According to Prof. Kingsley Moghalu, the next government must increase revenue and address waste and corruption in governance by bringing in competent professionals to manage the economy. In addition, the new president must take direct ownership and leadership of the power sector, and mandate key players, to enhance transmission infrastructure.
The CEO of Proton Energy, Mr Oti Ikomi, emphasizes the need for a single individual who is accountable and takes instructions from the president, who must take ownership and not just hold a titular position. This individual must have technical, administrative, and supervisory responsibilities and meet regularly with the president.
He cited the example of Egypt, where the President had weekly meetings, which improved the transmission infrastructure. He added that Siemens Energy, a giant global energy corporation, is willing to work with Nigeria, but the country must also be ready to expedite things.
Domestic Debts
Dr Baba Musa, the Director-General of the West African Institute for Financial and Economic Management, finds Nigeria’s large debt a major challenge. He highlights the need to remove fuel subsidies and increase revenue through innovative means, such as cancelling tax relief.
Dr Musa also emphasizes the importance of spending only on essential items until revenue improves. He calls for coordination between the fiscal and monetary authorities and suggests evaluating the quality of fiscal spending.
In contrast, Mrs Zainab Ahmed states that the main issue with the Nigerian economy is the lack of ability to generate sufficient revenue rather than the current debt situation. Therefore, domestic revenue needs to be increased to reduce reliance on borrowing.
All in all, the new Nigerian president, Bola Ahmed Tinubu, must tackle the various economic challenges by implementing critical reforms that will ensure sustainable recovery.
The president must prioritize fiscal management, establish a unified and stable market-based exchange rate, and put an end to fuel subsidies. These measures are necessary to navigate the country toward economic prosperity.
By Adedapo Adesanya
The Nigeria Revenue Service (NRS) says the rollout of electronic invoicing (e-invoicing) will strengthen tax compliance, curb revenue leakages and improve transparency in tax administration as it moves to fully digitise the country’s tax system.
The Project Lead for the NRS e-Invoicing Project, Mr Mohammed Bawa, stated this at the DigiTax E-Invoicing Compliance Breakfast Session held in Lagos on Wednesday.
The event, organised by DigiTax, an NRS-accredited e-invoicing platform, formed part of efforts to support the agency’s ongoing education and sensitisation campaign on the e-invoicing mandate.
Mr Bawa said the initiative aligns with global trends in tax digitisation and is expected to help improve Nigeria’s tax-to-GDP ratio, which remains one of the lowest in Africa.
According to him, the system will provide the NRS with greater visibility into transactions across sectors, formalise activities within the informal economy and standardise invoice formats nationwide using globally recognised invoice schemas.
He added that e-invoicing would improve operational efficiency for both businesses and tax authorities while supporting the NRS’ transition from manual and electronic tax administration processes to a fully automated system-to-system interaction model.
Mr Bawa noted that the legal framework for implementation is backed by the Nigeria Tax Administration Act, which prescribes penalties for non-compliance.
He disclosed that the NRS has completed onboarding large taxpayers and is preparing to enforce compliance with defaulting entities.
According to him, medium taxpayers are expected to begin compliance in the third quarter of 2026, while onboarding of emerging taxpayers will commence in 2027, with full adoption targeted for all taxpayers by the end of 2028.
Mr Bawa urged taxpayers yet to be onboarded onto the platform to begin the process and work with accredited service providers to ensure compliance.
On his part, Country Director of DigiTax Nigeria, Mr Olumide Akinsola, urged businesses to look beyond their internal systems and assess the compliance status of suppliers and counterparties.
He warned that businesses whose suppliers fail to transmit invoices through the MBS platform risk losing eligibility to claim Value Added Tax (VAT) input credits on such transactions, describing the resulting supply chain exposure as a significant commercial risk that many organisations have yet to quantify.
Mr Akinsola also announced the launch of DigiTax’s white paper, The State of E-Invoicing Readiness in Nigeria, which examines compliance adoption trends and the readiness gap across different taxpayer segments.
He added that DigiTax operates in Nigeria, Kenya, Zambia and the United Arab Emirates (UAE), noting that experience from those markets shows businesses that integrate early are better positioned to avoid disruptions when enforcement begins.
By Aduragbemi Omiyale
The names of about 100,000 companies registered by the Corporate Affairs Commission (CAC) are about to be deleted for inactivity, especially for failing to file their annual tax returns, Business Post reports.
This information was disclosed by the CAC via a notice signed by its management on Wednesday, July 15, 2026.
The list contains organisations like the Nigeria-Poland Chamber of Trade Invest Ltd, Alariwo of Afrika Ltd, Ovation Sports International, First Union Pension Fund Administrators, Investopedia Limited, Baptist High School Abuja Ltd, and Yobe Aluminium Manufacturing Industries Ltd, amongst others.
In the statement, the commission said its decision to strike off the names of the affected firms from the register aligns with the provisions of Section 692(3) (3) and (4) of the Companies and Allied Matters Act (CAMA), 2020.
However, the affected companies can still salvage the situation by filing all outstanding annual returns and regularising their records within 90 days.
“Please note that companies that fail to comply within the stipulated timeline shall be struck off the register without further notice,” it declared, expressing its continued commitment to providing prompt and efficient registration and regulatory services to the satisfaction of its valued customers.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange gained 1.75 per cent on Wednesday, July 15, pushing the NASD Security Index (NSI) up by 74.20 points to 4,316.51 points from 4,242.31 points, as the market capitalisation added N44.54 billion to finish at N2.590 trillion compared with the preceding session’s N2.546 trillion.
During the session, there was an 11.5 per cent rise in the value of transactions at midweek to N72.7 million from the preceding session’s N65.2 million, as there was a 3.7 per cent growth in the number of deals to 28 deals from the previous session’s 27 deals, while the volume of securities slumped by 64.5 per cent to 4.9 million units from 13.7 million units.
At the close of trades, Great Nigeria Insurance (GNI) Plc ended as the most active security by value on a year-to-date basis, with 3.4 billion units worth N8.4 billion, with the second spot occupied by Infrastructure Credit Guarantee (Infracredit) Plc after selling 2.3 billion units valued at N6.5 billion, and the third position was taken by Central Securities Clearing System (CSCS) Plc, which exchanged 74.3 million units for N5.3 billion.
GNI Plc also finished the trading day as the most traded stock by volume on a year-to-date basis, with a turnover of 3.4 billion units traded for N8.4 billion, followed by Infracredit Plc with 2.3 billion units transacted for N6.5 billion, and Resourcery Plc with 1.1 billion units sold for N415.7 million.
Business Post reports that the market breadth index was negative yesterday, as there were two price gainers and three price losers.
11 Plc added N22.36 to its value to close at N250.00 per share versus N227.64 per share, and CSCS Plc improved by N7.95 to N90.35 per unit from N82.40 per unit.
On the flip side, FrieslandCampina Wamco Nigeria Plc lost N1.37 to end at N150.00 per share versus N151.37 per share, UBN Property Plc depreciated by 6 Kobo to N1.75 per unit from N1.81 per unit, and Food Concepts Plc dropped 1 Kobo to close at N2.49 per share versus N2.50 per share.
