Tag: GDP

The Nigeria Extractive Industries Transparency Initiative (NEITI) has said the country’s tax-to-Gross Domestic Product (GDP) ratio is below Africa’s average.

This was contained in the Policy Brief the watchdog organization published titled: “Beyond Assent: Pathways for Implementing Nigeria’s New Tax and Revenue Framework.”

The document, which was released to The Nation exclusively yesterday said, “Despite its economic potential and resource wealth, Nigeria’s tax-to-GDP ratio of just 9.4 – 10.86 per cent below the African average of 16.8 per cent and the minimum 15 per cent threshold recommended by the African Union for sustainable development.”

According to NEITI, the result is a chronic revenue shortfall that has undermined public investment, widened the infrastructure gap, exacerbated inequality, and increased Nigeria’s exposure to debt and external vulnerabilities.

The document further noted that at the same time, decades of extractive industry audits and analyses have consistently exposed systemic inefficiencies in revenue assessment, collection, and remittance.

It added that the inefficiencies are compounded by data opacity, un-remitted revenues, arbitrary tax waivers, weak inter-agency coordination, all of which contribute to the loss of billions of Naira annually.

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NEITI, however, stressed that the new tax reform offers an opportunity to correct these structural deficiencies, modernize Nigeria’s tax administration, and build a stronger foundation for domestic fiscal sustainability.

On the other hand, the document said while the objectives of the reform are laudable, their realization hinges on how the framework is designed and implemented.

The document also throws light on the features of the tax reform as it relates to designated revenue accounts.

NEITI said in addition to the comprehensive classification of revenues, remittances are required to be into separate accounts designated for each revenue type/stream.

It also said that alternatively payments are required to be separated in bank statements to show, for each payment, the name of the paying entity, the receiving entity, and the purpose of the payment for proper revenue tracing and reconciliation.

On penalties, the document said non-compliance with tax remittances range from fines to revocation of licenses.

It noted that the Petroleum Profit Tax Act (PPTA) requires entities to file and pay their tax within five months of the end of the accounting year.

Failure to file and pay within the stipulated time, according to NEITI, is to attracts penalty of 10 per cent of the amount due, as well as interest at the prevailing commercial rate.

The National Bureau of Statistics (NBS) has said Nigeria’s Gross Domestic Product (GDP) grew by 3.98 per cent (year-on-year) in real terms in the third quarter of 2025.

The report also said the growth rate is higher than the 3.86 per cent recorded in the third quarter of 2024.

NBS said in nominal terms, the economy is N113.587 trillion and the performance is higher when compared to the third quarter of 2024, which recorded an aggregate GDP of N96.160 trillion, indicating a year-on-year nominal growth of 18.12 per cent.

The report noted that during the quarter under review, agriculture grew by 3.79 per cent, an improvement from the 2.55 per cent recorded in the corresponding quarter of 2024 while the growth of the Industry sector stood at 3.77 per cent from 2.78 per cent recorded in the third quarter of 2024 and the Services sector recorded a growth of 4.15 per cent frWom 4.97 per cent in the same quarter of 2024.

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“In terms of share of the GDP, the services sector contributed more to the aggregate GDP in the third quarter of 2025 at 53.02 per cent compared to the corresponding quarter of 2024 at 52.93 per cent .

It added that the oil sector recorded an average daily oil production of 1.64 million barrels per day (mbpd), higher than the daily average production of 1.47 mbpd recorded in the same quarter of 2024 by 0.17 mbpd and lower than the second quarter of 2025 production volume of 1.68 mbpd by 0.04mbpd.

“The non-oil sector grew by 3.91per cent in real terms during the reference quarter (Q3 2025). This rate was higher by 0.11per cent points compared to the rate recorded in the same quarter of 2024, which was 3.79per cent and higher than the 3.64per cent recorded in the second quarter of 2025.”

“This sector was driven in the third quarter of 2025 mainly by Agriculture (Crop production); Information and Communication (Telecommunications); Real Estate; Financial and Insurance (Financial Institutions); Trade; Construction; and Manufacturing, accounting for positive GDP growth. In real terms, the non-oil sector contributed 96.56per cent to the nation’s GDP in the third quarter of 2025, lower than the share recorded in the third quarter of 2024, which was 96.62per cent and higher than the second quarter of 2025 recorded as 95.95per cent.”

• Current GDP size should be N500tr, says Fasua

The Federal Government has lamented that delays in computing and releasing GDP (Gross Domestic Product) figures hampers the effectiveness of policy planning and compromises the credibility of economic data used to guide national decisions.

Dr. Tope Fasua, Special Adviser to the President on Economic Matters, who spoke during a webinar session organised by the NESG, themed: X-raying the Data: Insights from the Rebased GDP Data said the rebasing exercise — which last occurred in 2014 — was overdue and should be conducted every five years in line with international best practices.

Fasua noted that while the updated GDP figure significantly expands the economy’s official size, it may still fall short of reality. With new and rapidly growing sectors such as e-commerce, digital content creation, the blue economy, modular refineries, and informal trade now included in national accounting, he suggested that Nigeria’s actual economic value could be closer to N500 trillion.

He also pointed to the increasing role of digital platforms like YouTube, Spotify, and other content-driven services in the Nigerian economy. These platforms, previously excluded, now form part of the expanding services sector being tracked more comprehensively.

Fasua believes the rebasing provides scope for more accommodative monetary policy. He noted that with a larger GDP base, Nigeria’s debt-to-GDP ratio now sits around 40 percent, giving the country more flexibility compared to the ECOWAS ceiling of 60 percent and the World Bank threshold of 70 per cent. This, he said, opens a window for the Central Bank of Nigeria (CBN) to consider easing interest rates to support industrial growth and stimulate productive sectors.

However, he cautioned that the space created by the larger GDP should not be interpreted as a license for indiscriminate borrowing. He stressed that any increase in debt must be paired with improvements in tax policy and government spending. Recent tax legislation, he noted, is beginning to reduce the burden on small businesses and low-income earners, while redirecting obligations toward higher-income individuals and more profitable enterprises. Additionally, he pointed to tighter restrictions on tax waivers, which previously allowed undue benefits for powerful interests.

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Fasua compared the GDP to a company’s balance sheet — a measure of borrowing capacity — but warned that this capacity must be used wisely. He called for the new economic data to be leveraged for structured development financing, not simply as a talking point or political win.

He also urged greater institutional collaboration among ministries, departments, agencies, and the private sector in data collection and sharing. Reliable and timely statistics, he argued, are critical for effective economic governance and policy coherence.

Yinka Babalola, Country Director Nigeria International Budget Partnership took a more cautious view. While acknowledging the importance of accurate national statistics, she said the increase in GDP does not automatically improve the lives of everyday Nigerians. Rising economic numbers, she argued, do not mean food is cheaper, healthcare is better, or wages are higher.

She described GDP as a limited metric that must be interpreted alongside other indicators to assess true social progress. While the updated GDP may improve Nigeria’s fiscal metrics — for example, by lowering the fiscal deficit as a percentage of GDP — it does not directly generate additional revenues or improve expenditure outcomes.

According to Babalola, revenue mobilisation remains Nigeria’s most urgent fiscal challenge. Without better tax collection systems and broader coverage of the tax base, especially among middle- and high-income earners, the government risks relying too heavily on borrowing.

She also drew attention to what GDP figures often leave out — particularly unpaid care work, which disproportionately involves women, and the country’s growing inequality. These exclusions, she said, contribute to a distorted view of national progress and obscure the challenges facing the majority of citizens.

On the expenditure side, Babalola pointed to recurring issues with budget execution. She noted that many agencies fail to use their full allocations, not due to lack of need but because of weak capacity and poor project implementation. As a result, budget increases often fail to translate into real development impact.

To address this, Babalola called for greater transparency in procurement, increased citizen involvement in budgeting processes, and more effective legislative and audit oversight. She argued that simplified, accessible budget information would enable communities to monitor public spending more effectively.

Dr. Ekundayo Mesagan, Senior Faculty, Pan Atlantic University welcomed the rebasing as a technical improvement that gives a more accurate picture of the economy’s structure. “The updated GDP figure has raised Nigeria’s per capita income from $800 to around $1,000.” Although he cautioned that this statistical shift does not imply a tangible improvement in living conditions.

Mesagan said the inclusion of sectors such as information and communications technology (ICT), entertainment, and real estate makes the economy appear more diversified — a useful development for sector-specific planning and policy targeting. With better data on where growth is occurring, he said policymakers can develop more precise interventions, particularly in youth-driven sectors.

He advocated for a shift toward bottom-up economic planning that prioritises small businesses, informal enterprises, and emerging industries with strong employment potential. These segments, he argued, have a more direct impact on poverty reduction and household income growth.

Mesagan backed recent tax reforms that exclude businesses earning below N50 million annually from corporate income tax, calling it a positive step. He proposed additional fiscal incentives and tailored credit schemes for micro-enterprises and low-income producers, which often face structural barriers to growth.

He also urged policymakers to use the rebased data to improve poverty targeting and asset mapping, especially in underserved communities. According to Mesagan, accurate identification of vulnerable populations is key to ensuring that social intervention programmes are both efficient and impactful.

While recognising the importance of updated data, he warned against mistaking statistical improvements for actual progress. Until broader issues like food insecurity, joblessness, and service delivery are addressed, the figures remain largely cosmetic.

The consensus among the three experts is clear: the rebased GDP is a necessary statistical correction, but its real value will only be realised if it leads to meaningful policy change. Accurate data can help guide development, but without institutional reform, fiscal transparency, and inclusive planning, the benefits will remain largely on paper.

The Centre for the Promotion of Private Enterprise (CPPE), yesterday hailed the sectoral contributions in the first quarter (Q1) 2025 as recently released by the National Bureau of Statistics (NBS) of the rebased Gross Domestic Product (GDP) figures, now anchored to a new base year of 2019.

The Group noted that the re-basing exercise represents a significant milestone in Nigeria’s economic management, as it enhances the relevance, accuracy, and timeliness of national economic data and aligns Nigeria’s statistical reporting with international best practices.

A review of sectoral performance in Q1 2025 shows that 37 sectors recorded growth, nine sectors contracted, and three sectors in recession. Top-performing sectors included financial services, 15.3 per cent; oil refining, 11.51 per cent; transportation, 14.08 per cent; ICT, 7.4 per cent and metal ores, 25 per cent.

On the downside, the CPPE noted contraction in the following sectors: livestock -16.7 per cent; fishing, -0.21 per cent; textiles, -1.63 per cent; coal mining,-22.3 per cent; quarry & minerals, -21.55 per cent; plastics and rubber, -3.2 per cent; iron & steel, -0.35 per cent; air transport, -0.81 per cent. Sectors in recession include air transport, textiles, and coal mining.

A further analysis of the sectors showed that in Q1 2025, major contributors to GDP included trade, crop production, real estate, ICT, construction, petroleum and gas, food and beverage, financial institutions, and manufacturing.

The oil sector contributed 3.97 per cent to GDP, while the non-oil sector accounted for 96.03 per cent, indicating the sustained dominance of the non-oil sector in the Nigerian economy. But productivity remains a major challenge for the sector.

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The share of agriculture improved from 22.12 per cent to 25.8 per cent, and the service sector’s contribution increased to 53.09 per cent from 50.22 per cent pre-rebasing. Real estate sector ranking rose to third among GDP contributors, following crop production 17.58 per cent and trade 17.42 per cent, with real estate at 10.78 per cent, ICT at 6.18 per cent and crude oil at 5.85 per cent.

According to the CPPE, despite the non-oil sector’s dominant contribution to GDP, its share of government revenue remains disproportionately low. This indicates persistent productivity and revenue mobilisation challenges in the non-oil economy, which must be addressed to ensure fiscal sustainability and inclusive growth.

The Chief Executive, CPPE, Dr. Muda Yusuf, the GDP re-basing is a critical statistical exercise that updates the base year used for calculating national output, ensuring that the structure of the economy is accurately reflected in line with current realities.

“By adopting 2019 as the new base year, Nigeria’s GDP figures now incorporate recent changes in consumption patterns, production technologies, and sectoral dynamics. This provides a more realistic and comprehensive picture of the economy, which is essential for effective policy formulation, planning, and investment decisions.

Yusuf said special attention is needed for sectors in recession, that is, those that contracted and those experiencing slow growth. “Addressing structural challenges, improving access to finance, tackling insecurity and fostering innovation will be critical to stimulating recovery and growth,” he canvassed.

The CPPE boss further recommended that high-performing sectors should continue to receive support to sustain and further improve their output, leveraging their potential as engines of growth, revenue generation and job creation.

Besides, he noted that there is a pressing need to address the disconnect between the non-oil sector’s significant GDP contribution and its relatively lower contribution to government revenue. Strengthening tax administration, broadening the tax base, optimising non-tax revenues and promoting formalisation of economic activities in the informal sector are essential steps, while more frequent and timely GDP re-basing exercises should be enshrined to ensure that economic data remains current and relevant for policy and investment decisions, including continuous engagement with stakeholders—including government agencies, private sector participants, researchers, and development partners, for effective policy formulation and implementation.