By Frontline Reporters

Nigeria’s tax collections have surged by 113 per cent in less than three years, rising from N12.3tn in 2023 to N27.1tn as of July 2026, according to the Nigeria Revenue Service.

The revenue authority attributed the sharp increase to the digitisation of the tax system, the enactment of four new tax reform laws, the transformation of the revenue service and an executive order designed to close loopholes in the tax system.

In an internal report on the state of the Nigerian economy, the NRS said the country was moving from a period of severe macroeconomic distress towards a more stable and resilient economy following the implementation of a series of difficult reforms by the administration of President Bola Tinubu.

“Tax collections more than doubled from N12.3tn in 2023 to N27.1tn as of July 2026 with the digitisation of tax systems, four new tax reform laws, the transformation of the revenue service and an executive order that closed loopholes in the system,” the NRS said.

“The Nigerian economy has moved decisively from acute macroeconomic distress toward a more stable and increasingly resilient footing.”

The revenue service attributed the development to what it described as Tinubu’s economic management and determination to implement reforms under the administration’s Renewed Hope Agenda.

According to the report, the administration inherited four major economic distortions that had undermined government revenue and economic growth. They included a fiscally unsustainable fuel subsidy regime, an opaque foreign exchange system that discouraged investment, a non-performing oil sector and a tax base that was “far below its potential.”

The NRS acknowledged that the initial impact of the reforms created significant economic difficulties but maintained that major economic indicators had subsequently begun to improve.

It cited falling inflation, an improvement in the balance of payments, increased crude oil production, Nigeria’s emergence as a net exporter of petroleum products and the more than doubling of tax collections as evidence of the recovery.

The report also highlighted the increase in the minimum wage, saying it had doubled between 2023 and 2026. It further cited United Nations Children’s Fund estimates showing that the number of out-of-school children had declined from 20 million to 18.3 million following government policies and incentives.

The NRS said the government’s naira-for-crude arrangement with the Dangote Petroleum Refinery and other domestic refineries had contributed significantly to a shift in Nigeria’s petroleum trade position.

According to the report, the arrangement helped Nigeria move from being a net importer of petroleum products to a net exporter after decades of dependence on imports. It added that Ghana had recently decided to pursue a similar policy in its petroleum sector.

Crude oil production, the report said, increased from about 1.2 million–1.3 million barrels per day in 2023 to 1.73 million barrels per day by July 2026, equivalent to 104 per cent of Nigeria’s OPEC quota.

The increase is significant for government revenue because crude oil remains Nigeria’s largest source of foreign exchange and a major contributor to public finances.

The NRS also pointed to developments in the capital market as evidence of improving economic confidence. It said the market capitalisation of the Nigerian Exchange rose from N30.36tn in 2023 to N161tn in 2026, describing the increase as a major source of wealth creation for millions of Nigerians who invest in the stock market.

The report attributed the market rally partly to improved macroeconomic credibility, bank recapitalisation and a growing pool of domestic institutional investment.

Nigeria’s external reserves also increased sharply during the period under review, rising from unrestricted reserves of $3.99bn in 2023 to $51.9bn as of July 2026, which the NRS described as a 17-year high.

The country’s balance of payments also moved from a $3.34bn deficit to a $2.38bn surplus in the first quarter of 2026, while the trade position improved from a marginal surplus of N44.7bn to N7.55tn during the same period.

The composition of exports also changed, with exports of other oil products, excluding crude, rising by 51 per cent year-on-year to N6.78tn in the first quarter of 2026.

The revenue service said improved investor confidence was also reflected in capital importation. Annual capital importation rose from $3.9bn in 2023 to $23.22bn in 2025, while inflows reached $10.37bn in the first quarter of 2026 alone.

The report said foreign portfolio investment had been particularly strong, while foreign direct investment had also improved. According to the NRS, the increase in capital inflows reflected stronger investor confidence as the reforms reshaped Nigeria’s operating environment.

The NRS further highlighted the expansion of the compressed natural gas programme as part of the government’s response to the removal of the petrol subsidy.

According to the report, Nigeria had no large-scale CNG programme three years ago and depended heavily on imported petrol and diesel. By 2026, however, more than 100,000 vehicles had reportedly been converted to CNG, with over $2bn in investment mobilised and more than 10,000 jobs created.

The NRS estimated that CNG could reduce running costs by between 40 and 60 per cent compared with petrol. It said some commercial drivers had seen their monthly fuel bills fall from about N50,000 to N18,000 after converting their vehicles.

On agriculture and food security, the report recalled that the administration declared a state of emergency on food security in July 2023 and subsequently introduced measures including the release of strategic grain reserves, establishment of a N100bn National Agricultural Development Fund, fertiliser distribution and an agricultural mechanisation programme.

Federal agricultural allocation rose from N228.4bn in 2023 to N826.5bn in the 2025 budget, according to the report. The NRS said food prices had fallen by about 50 per cent by March 2026, citing the Ministry of Agriculture.

It, however, acknowledged that agriculture would require several planting seasons before increased government support could fully translate into higher production.

On public debt, the NRS acknowledged that Nigeria’s total debt stock had risen substantially from N87.4tn in 2023 to N159.28tn in late 2025. It argued, however, that a more important measure was the country’s debt relative to the size of its economy.

According to the report, the debt-to-GDP ratio declined from 38 per cent in 2023 to 35.5 per cent in 2025 and 32.3 per cent in 2026. The revenue service described the decline as the first sustained reduction in the ratio in more than a decade.

It also said debt servicing as a proportion of government revenue had declined from 68 per cent to an International Monetary Fund-projected 53 per cent.

The NRS said the combination of higher tax collections, increased oil production, stronger capital inflows, rising reserves and improved trade and balance of payments positions pointed to an economy gradually emerging from the severe pressures that followed the government’s early reforms.

The report, however, acknowledged that the gains came after what it described as “painful” adjustments and stressed that continued implementation of the reforms would be necessary to consolidate the recovery.

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