{
  "id": 2348340,
  "title": "Beyond Nominal Value Headline: Why Bigger Revenues Won’t Buy Nigeria a Bigger Economy",
  "url": "https://urgent.news/2026/08/21/beyond-nominal-value-headline-why-bigger-revenues-wont-buy-nigeria-a",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-08-21T09:20:46.000Z",
  "source": {
    "name": "This Day",
    "slug": "this-day",
    "url": "https://www.thisdaylive.com/2026/08/21/beyond-nominal-value-headline-why-bigger-revenues-wont-buy-nigeria-a-bigger-economy/"
  },
  "original_language": "en",
  "account": "In Nigeria's fiscal landscape, the past three years stand out as unprecedented. The Federation Account amassed an unprecedented ₦88.91 trillion in revenue from 2023 to 2025, tripling the ₦29.07 trillion of the preceding four years. According to the Office of the Accountant-General of the Federation (OAGF), corporate income tax surged by 315 percent over three years, while Value Added Tax (VAT) increased by 283 percent. State and local governments witnessed a record ₦29.04 trillion in disbursements, a staggering increase over the entire previous administration's contributions.\n\nTo assess the true potential of this revenue surge, one must consider Nigeria's economic standing before the reforms commenced. In 2014, after rebasing the national accounts, Nigeria claimed the title of Africa's largest economy, boasting a GDP of US$510 billion, surpassing South Africa and every other African nation. This position was maintained for nearly a decade. However, this nominal ranking concealed the economic stagnation beneath the surface. Real growth consistently lagged behind population growth, resulting in stagnant average incomes. The petroleum subsidy, amounting to about ₦10 trillion annually, played a significant role in this decline. Moreover, the achievement of the number one ranking was largely artificial, based on an artificially managed exchange rate that restricted the actual market value of dollars.\n\nThe exchange rate unification in June 2023 brought about a more accurate reflection of Nigeria's economic reality. The naira depreciated, causing Nigeria's GDP in dollar terms to plummet from $477 billion in 2022 to roughly $253 billion in 2024. The IMF's April 2024 rankings placed South Africa first, Egypt second, Algeria third, and Nigeria fourth. This devaluation, while not indicative of economic collapse, exposed the true size of the economy in dollar terms, refining it to an estimated ₦372.8 trillion, or approximately $243 billion, according to the NBS 2025 rebasing.\n\nThis revelation highlights the limitations of nominal measures in assessing economic progress. While the recent revenue surge is substantial, it primarily results from accounting adjustments rather than genuine wealth creation. The $243 billion economy is merely a repositioned fourth-place finisher, requiring an extraordinary feat to quadruple by 2030—a goal that is both ambitious and challenging. The revenue increase, while significant, does not inherently contribute to the target of a $1 trillion economy. Instead, it serves three primary purposes: financing, credibility, and insurance.\n\nFirstly, the ₦88.91 trillion in revenue from the Federation Account between 2023 and 2025 can fund critical investments in both physical and human capital, which were previously constrained by fuel subsidies and the artificial exchange rate. Secondly, the substantial revenue, with a broad base from non-oil sources, enhances the country's fiscal credibility among international markets, rating agencies, and investors. A stable currency is crucial, as depreciation directly reduces the economy's dollar size. Lastly, the revenue surge acts as an insurance policy, allowing for sustained funding of the investment program even in the face of potential declines in oil prices.\n\nThe true purpose of this revenue wave is not to achieve a long list of projects but to address fundamental constraints that hinder economic growth. The most pressing of these constraints is reliable electricity. Despite having the capacity for about 13,000 megawatts, Nigeria can only deliver a fraction of this power due to an unreliable grid. Factories, banks, hospitals, and markets often operate on costly diesel and petrol, creating a hidden tax that stifles production and hampers competitiveness. Addressing the transmission backbone, improving metering, settling debts that burden generation companies, and extending the grid with solar mini-grids could transform every reliable megawatt into a source of output, employment, and taxation. Electricity, measured in gigawatts, is the critical physical prerequisite for the trillion-dollar economy.\n\nFollowing power, the logistics sector presents another significant barrier. Nigerian goods face double taxation: one, in the exorbitant cost of transporting goods across roads, and two, in the inefficiency of port operations, where cargo clearance often takes weeks instead of hours. This results in substantial losses for food products between farms and markets, as well as for manufactured goods. Overcoming these logistical challenges would significantly enhance the overall economic output and competitiveness.",
  "summary": "By Victoria Hauwa Jatto Nigeria’s public finances have never seen anything like the last three years. According to revenue and disbursement data published by the Office of the Accountant-General of",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}