Nigeria’s tax revenue has more than doubled in less than three years, rising from N12.3tn in 2023 to N27.1tn by July 2026, as the Federal Government moves to strengthen its non-oil revenue base and reverse years of fiscal weakness.
The Nigeria Revenue Service disclosed the figures in an internal report on the state of the economy, attributing the 113 per cent increase to the digitisation of tax administration, the enactment of four tax reform laws, restructuring of the revenue service and measures to plug loopholes in the tax system.
The revenue surge is one of the clearest indicators cited by the NRS of the fiscal impact of the economic reforms introduced by the administration of President Bola Tinubu, although the report acknowledged that the reforms initially imposed significant economic pain on households and businesses.
According to the report, the government inherited four major distortions in 2023: an unsustainable petrol subsidy regime, an opaque foreign exchange system, a poorly performing oil sector and a tax base significantly below its potential.
It said subsequent reforms had begun to produce improvements across several major economic indicators, including inflation, crude oil production, external reserves, capital inflows, trade and the balance of payments.
Nigeria’s crude oil output, according to the NRS, rose 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 the country’s OPEC quota.
The increase is significant for government finances because oil remains a major source of foreign exchange and public revenue.
The report also pointed to the Federal Government’s crude-for-naira arrangement with the Dangote Petroleum Refinery and other domestic refiners as a major factor behind Nigeria’s changing petroleum trade position.
It said the arrangement, coupled with increased domestic refining, had helped move Nigeria from decades of dependence on imported petroleum products to becoming a net exporter.
Beyond oil and taxation, the NRS said Nigeria’s external reserves had risen from $3.99bn in unrestricted reserves in 2023 to $51.9bn by July 2026, which it described as the highest level in 17 years.
The balance of payments also swung from a $3.34bn deficit to a $2.38bn surplus in the first quarter of 2026, while the trade balance improved dramatically from a marginal N44.7bn surplus to N7.55tn during the same period.
Non-crude petroleum exports also expanded, with exports of other oil products rising 51 per cent year-on-year to N6.78tn in Q1 2026.
Capital inflows provided another measure of improving investor sentiment. 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 NRS said foreign portfolio investment accounted for a significant share of the inflows, while foreign direct investment also improved.
The capital market likewise recorded a dramatic expansion, with the market capitalisation of the Nigerian Exchange rising from N30.36tn in 2023 to N161tn in 2026.
The NRS attributed the rally partly to improved macroeconomic credibility, bank recapitalisation and increased participation by domestic institutional investors.
However, the report acknowledged that Nigeria’s debt burden remained substantial.
Total public debt rose from N87.4tn in 2023 to N159.28tn by late 2025. The NRS argued, however, that debt sustainability should be assessed against the size of the economy rather than the nominal debt stock alone.
On that basis, it said the debt-to-GDP ratio had fallen from 38 per cent in 2023 to 35.5 per cent in 2025 and 32.3 per cent in 2026.
Debt service as a proportion of government revenue was also projected to fall from 68 per cent to 53 per cent, based on an International Monetary Fund projection.
The report further highlighted the expansion of compressed natural gas as part of the government’s response to petrol subsidy removal.
It said more than 100,000 vehicles had been converted to CNG by 2026, with over $2bn reportedly mobilised for the programme and more than 10,000 jobs created.
According to the NRS, CNG could cut vehicle running costs by between 40 and 60 per cent compared with petrol.
The government also pointed to developments in agriculture and food security, following its July 2023 declaration of a food-security emergency.
Federal agricultural allocation rose from N228.4bn in 2023 to N826.5bn in the 2025 budget, alongside fertiliser distribution, grain releases, agricultural financing and mechanisation initiatives.
The NRS cited Ministry of Agriculture figures indicating that food prices had fallen by about 50 per cent by March 2026, while cautioning that agricultural interventions would require several planting cycles before their full impact on output became evident.
The report also cited a rise in the minimum wage and a decline in the estimated number of out-of-school children as evidence of broader social gains from the reforms.
Taken together, the NRS said the rise in tax revenue, stronger oil production, higher reserves, increased capital inflows and improved external balances showed that Nigeria was gradually moving away from the severe macroeconomic instability that followed the initial reform measures.
But the figures also underline the central challenge facing the government: converting stronger fiscal and external indicators into sustained improvements in household welfare.
The revenue service acknowledged that the recovery followed “painful” adjustments and warned that continued implementation of the reforms would be necessary to consolidate the gains.
For the Tinubu administration, the sharp increase in tax collections is particularly significant. With oil revenues vulnerable to production and global price shocks, a broader and more efficient tax base could provide the government with a more predictable source of funding for infrastructure, social services and debt obligations.
The real test, however, will be whether the improvement in government revenue and macroeconomic indicators translates into stronger purchasing power, lower living costs, increased private-sector investment and better living standards for Nigerians.
This version keeps the strongest numbers up front and adds the key economic tension: improving government and external-sector indicators versus the still-important question of whether ordinary Nigerians are actually feeling the recovery.
