Nigeria’s tax and non-oil income are fast dominating federal collected revenues, with tax revenue surging by over 87 per cent in 15 years, according to a new report by Quartus Economics.

The report, which reviewed fiscal trends between 2010 and 2025, stated that tax revenues have emerged as the primary driver of government income, accounting for over 87 per cent of federally collected revenue in 2024, while non-tax revenues dropped from over 52 per cent in 2014 to just 12.9 per cent in 2024.

The report also showed that Nigeria’s long-standing dependence on crude oil revenues has significantly weakened.

According to the report, oil revenue, which accounted for as much as 73.9 per cent of total federation revenues in 2010, declined sharply to 25.8 per cent in 2024, while in contrast, non-oil revenues rose from about 25 per cent in 2010 to nearly 75 per cent by 2024, due to sustained reforms in tax administration and policy.

The report stated that over a 15-year period, Nigeria generated N161.1 trillion in total federation revenues, which split almost evenly between N80.6 trillion (49.99 per cent) from oil sources and N80.57 trillion (50.01 per cent) from non-oil sources
The transformation, according to the report, followed the fiscal crisis triggered by the 2014 oil price collapse, which exposed Nigeria’s vulnerability to commodity shocks.

The report noted that economic growth slowed sharply from 6.1 per cent to 1.2 per cent yearly, while gross domestic product (GDP) per capita plunged by nearly 75 per cent from $4,332 in 2014 to about $1,120 in 2024.

The report stated that poverty also worsened, with an additional 65 million Nigerians falling below the poverty line by 2023.

According to the report, the government, in response, ramped up borrowing, leading to a surge in public debt.

The report stated that over the past decade, Nigeria’s debt-to-GDP ratio has nearly tripled by 2.87x its 2015 level, outpacing Sub-Saharan

Africa’s 1.8x average and the 1.6x average for emerging markets.

Despite these pressures, the report said, revenue performance has strengthened markedly in recent years, with total revenue by 2024 nearly four times 2019 levels, while tax collections grew even faster, reaching more than five times 2019 levels by 2025.

The report showed that between 2023 and 2025, Nigeria generated N62.3 trillion in tax revenues, with the non-oil sector contributing over 73 per cent, amounting to N45.48 trillion, compared to just 27 per cent from oil.

Also, tax revenues nearly tripled within three years, rising from N10.18 trillion in 2022 to N28.29 trillion in 2025, the report stated.

The report stated that in 2025 alone, tax collections increased by 30 per cent, with non-oil taxes accounting for nearly 84 per cent of the growth, while oil taxes contributed less than 15 per cent.

The report noted that over the same period, more than 85 per cent of total tax revenue growth was driven by non-oil sectors.

The report attributes the revenue surge to a mix of structural reforms, including the increase in Value Added Tax (VAT) from five per cent to 7.5 per cent in 2022, alongside improved tax administration and new fiscal policies.

These measures, the report stated, have significantly broadened the tax base and reduced reliance on volatile oil earnings.
The report noted that further gains are emerging from reforms in the oil and gas sector.

The report stressed that following the implementation of Executive Order 9, which centralised revenue collection, oil and gas royalty remittances increased by over N200 billion in February 2026 alone.

The report, however, warned that fiscal gains are tempered by rising debt obligations as Nigeria’s public debt has expanded to 14.4 times its 2013 level, while yearly debt service costs have surged to nearly 15 times pre-crisis levels.

The report explained that external debt, when measured in naira, has ballooned to 51.2 times its 2013 value, largely due to currency depreciation, especially as dollar terms is 5.2 times higher.

The report cautioned that while debt levels remain within sustainable thresholds, weak returns on borrowed funds pose a significant risk to long-term fiscal stability.

On fiscal outlook growth, the report stated that Nigeria’s transition to a tax-driven fiscal state marks a critical turning point, thereby reducing vulnerability to external shocks and improving revenue resilience.

The report stressed that without disciplined spending and productive investment, the benefits of increased revenues could be undermined.
The report added that with taxes now forming the bulk of public revenues, citizens are expected to demand greater accountability across all levels of government, particularly in the management of both earned revenues and rising public debt.

The report added that Nigeria’s fiscal outlook will depend on ithe government ability to convert growing revenues into tangible improvements in infrastructure, productivity and living standards, while sustaining reforms that have driven the diversification of its revenue base.