{
  "id": 6935131,
  "title": "Nigeria’s N3.87 trillion tax breaks face scrutiny as FDI stays weak",
  "url": "https://urgent.news/2026/09/12/nigerias-n3-87-trillion-tax-breaks-face-scrutiny-as-fdi-stays-weak",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-09-12T13:51:20.000Z",
  "source": {
    "name": "Nairametrics",
    "slug": "nairametrics",
    "url": "https://nairametrics.com/2026/09/12/nigerias-n3-87-trillion-tax-breaks-face-scrutiny-as-fdi-stays-weak/"
  },
  "original_language": "en",
  "account": "Nigeria's government is scrutinizing the tax breaks provided to businesses, investors, and consumers in an effort to increase domestic revenue. The country's tax-to-GDP ratio is significantly lower than the average for African countries, at 8.2% in 2023 compared to 16.1%. However, there is no specific data on the total value of tax incentives given to attract foreign direct investment since President Bola Tinubu took office in May 2023.\n\nThe Medium Term Expenditure Framework (MTEF) 2024-2026 estimates various forms of tax expenditures, including the Road Infrastructure Tax Credit Scheme, which is projected to cost N45.26 billion in 2023, increasing each year up to N66.61 billion in 2026. Overall tax expenditures are projected at N3.87 trillion in 2026, with N1.64 trillion from Value Added Tax (VAT) and N1.11 trillion from Company Income Tax (CIT).\n\nThe MTEF uses a broader definition of tax expenditure, covering exemptions, deductions, credits, reduced rates, and other measures by which the government forgos revenue. For instance, the Road Infrastructure Tax Credit Scheme allows companies to receive tax credits for financing eligible public road projects, aimed at mobilizing private capital for infrastructure rather than providing a tax holiday.\n\nThe government has also suspended or redesigned certain measures, such as the proposed 5% excise duty on telecommunications services and increases in excise duties on locally manufactured products. Targeted incentives have been introduced for sectors like upstream oil and gas, deep offshore petroleum operations, pharmaceutical manufacturing, and clean energy.\n\nDespite these efforts, foreign direct investment in Nigeria remains low, with only about $923 million recorded in 2025, representing roughly 4% of total capital imported. The Tinubu administration has announced over $50 billion in investment commitments, but actual FDI inflows amount to about $2.06 billion between Q2 2023 and Q1 2026. This discrepancy suggests that investors are attracted to Nigerian financial markets but face challenges when considering long-term capital investments for factories, infrastructure, and productive businesses.",
  "summary": "Nigeria’s push to raise domestic revenue is putting greater scrutiny on the tax incentives granted to businesses, investors and consumers through... The post Nigeria’s N3.87 trillion tax breaks face scrutiny as FDI stays weak appeared first on Nairametrics .",
  "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."
}