Macroeconomic Report & Economic Updates

Nigeria Economic Update (Issue 19)

Data from the National Bureau of Statistics shows that Value Added Tax (VAT) revenue for the first quarter of 2021 (Q1 2021) stood at N496.39 billion. This represents 9.17 percent and 52.93 percent increase relative to the previous quarter and corresponding quarter of 2020, respectively1. Further disaggregation shows that the following sectors generated the highest VAT: other manufacturing sector – N49.41 billon and professional services – N42.50 billion. Mining sector and textile/garment sector contributed the least to VAT collections during the period under review. The sectorial distribution of VAT revenue is an indication of the importance of the manufacturing and service sectors to the Nigerian economy. It is therefore important to continuously improve the business climate in the country to enhance the growth potential of these sectors as they are yet to reach their optimal levels. Enhancing overall business climate would also attract investments in other less-performing sectors of the economy, which should ultimately lead to more tax revenues to fund much-needed infrastructural projects in the country.

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