Nigeria Achieves Fiscal Milestone: Non-Oil Revenue Now 75% of Federation Funds

Nigeria has marked a historic turning point in its economic landscape, as non-oil revenue now accounts for 75 per cent of federally collected funds, according to a March 2026 report by Quartus Economics. This achievement ends a 14-year period of heavy reliance on crude oil, signaling a major shift in the country’s fiscal structure.

The report highlights a dramatic change in the nation’s revenue composition. Tax revenue alone now contributes 87 per cent of total federal income, while oil’s share has dropped sharply to just 27 per cent. Experts describe this as a transformation that strengthens Nigeria’s financial stability and reduces its vulnerability to global oil market fluctuations.

Historically, Nigeria’s federal finances were heavily dependent on oil, with crude accounting for roughly three-quarters of revenue between 2010 and 2014. This reliance left the economy exposed, particularly during the 2014 oil price crash, which triggered a fiscal crisis, slowed GDP growth, and caused per capita GDP to fall nearly 75 per cent over a decade.

The surge in non-oil revenue has been fueled by tax reforms, administrative improvements, and strategic policy interventions. Notable measures include an increase in VAT from 5 per cent to 7.5 per cent and the centralization of oil and gas revenue under Executive Order 9, which alone boosted royalty remittances by over N200 billion in February 2026. Analysts say these initiatives reflect a commitment to building sustainable and resilient public finances.

While the shift to non-oil revenue is celebrated, the report also notes Nigeria’s rising public debt, which has grown from 12.5 per cent of GDP in 2014 to 38.8 per cent in 2024. Though manageable, the increase emphasizes the need for continued fiscal vigilance as the country consolidates its non-oil revenue gains and positions itself for long-term economic growth.

source: punch