In the latest report by the World Bank, it is reported that Nigeria’s revenue surged to ₦12.4 trillion in 2024, up from ₦6.8 trillion in 2023, a notable increase of 82.4%.
The surge was driven by three key reforms: the unification of foreign exchange (FX) rates, improved tax collection, and changes to how public agencies remit revenue.
The FX rate unification is a major factor behind this growth. Before the reform, oil and other FX-related revenues were recorded at a very low official rate of about 53% below the market rate. This resulted in massive revenue losses. With unification, the government now receives more accurate market-based returns, especially from oil exports and import duties.
The second factor was enhanced tax administration. The Federal Inland Revenue Service adopted the TaxPro Max platform to streamline tax processes and began collecting VAT directly at the source from specific sectors. As a result, non-oil tax revenues climbed, with local VAT collection alone growing by over 86% in 2024.
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Thirdly, the government introduced a policy in December 2023 requiring Ministries, Departments, and Government-Owned Enterprises to automatically remit revenue into the treasury. This contributed an additional 0.8 percentage points to the revenue-to-GDP ratio, which rose from 2.9% in 2023 to 4.5% in 2024.
Despite these improvements, the World Bank cautioned that Nigeria’s revenue remains low compared to its developmental needs. The report suggested that Nigeria could increase customs revenue by 66% by removing import bans and arbitrary tariffs. These trade policies, it said, raise prices, encourage smuggling, and reduce customs efficiency.
Furthermore, the World Bank recommended aligning Nigeria’s tariff system with the ECOWAS Common External Tariff, starting with food items, to support household welfare. Reducing import restrictions would help lower prices, increase consumer access to goods, and reduce poverty, which could fall by as much as 2.6 percentage points.
