The Nigerian economy is dominated by crude oil, which accounts for about 10% of the country’s GDP, 70% of government revenue and more than 83% of the country’s total export earnings, according to OPEC. Nigeria is the world’s 8th oil exporter, and its oil reserves are estimated at about 35 billion barrels.
The broad purpose of this article is to empirically ascertain the web of the three major Nigeria’s daily source of income and revenues profile that has aiding development mesh.
To make our list of the three major Nigeria’s daily source of income and revenues profile authentic, we make research to investigate whether aggregate revenue proxied by various revenue sources such as total federally collected revenue, oil revenue, non-oil revenue, federation account and federal government retained revenue have any significant impact on the overall performance of the Nigerian economy.
In order to give an adequate account of major Nigeria’s daily source of income and revenues, we collected some of our data Central Bank of Nigeria website and Federal Inland Revenue Service official website.
On the basis of our findings we discovered three major Nigeria’s daily source of income and revenues thereof among numerous number of revenue sources in Nigeria, in light of the need to encourage and promote economic development both at the national and sub-national levels sector.
Major Nigeria’s Daily Source of Income and Revenues
Here’s the list of the three major Nigeria’s daily source of income and revenues profile with the tendency to enhance and encourage, promote economic development in Nigeria:
1. Crude Oil Revenues;
The Nigerian economy is dominated by crude oil, which accounts for about 10% of the country’s GDP, 70% of government revenue and more than 83% of the country’s total export earnings, according to OPEC.
Nigeria is the world’s 8th oil exporter, and its oil reserves are estimated at about 35 billion barrels. The country also has become one of the lead exporters of liquefied natural gas, which accounts for an additional 15.5% of exports.
The country also extracts tin ore and coal for domestic use. Nigeria’s other natural resources include iron ore, limestone, niobium, lead, zinc and arable land. Another key sector of the Nigerian economy is agriculture, which employs 34.7% of the workforce and contributes for about 21.9% of GDP.
Crude Oil Revenues hit ₦8 trillion in 2011 and have never been as high since. The big drop happened in 2015 when oil revenues fell from ₦6.8 trillion to ₦3.8 trillion following a plunge in oil prices and a subsequent drop in oil production due to militants in the Niger Delta.
Oil prices were above $100 per barrel prior to the collapse; now, we have an assumed price of $57 per barrel for the 2020 Budget. Moreover, future projections are equally modest.
The United States Energy Information Administration (EIA) expects oil prices to average $60 in 2020 and the World Bank expects $70 in 2030. So, oil revenues will grow in the future, but probably not fast enough to solve our revenue problems.
2. Agricultural Revenues;
According to available information on google search, in 2020, Nigeria’s GDP amounted to 152,32 trillion Naira, over 400 billion U.S.dollars. About 24 percent of Gross Domestic Product was generated by the agricultural sector. The largest contribution was given by crop productions, which generated 21.8 percent of the country’s GDP in 2020.
The Southern and Central regions of the country produce yam, rice, and maize while the Northern regions produce sorghum, millet, rice, and livestock farming.
Other major crops include beans, sesame, cashew nuts, cassava, cocoa beans, rubber, soybeans, and bananas. Nigerian agriculture is mainly centered on subsistence farming and it is not modernized enough.
Agriculture contributed 23.92% to nominal GDP, higher than the rates recorded for the second quarter of 2019 and the first quarter of 2020 which recorded 19.39% and 20.88% respectively.
3. Tax Revenues ;
According to the Federal Inland Revenue Service, the country’s total tax collection in 2019 was 5.26 trillion naira ($13.5 billion)
Nigeria recorded a total tax collection of about N8.8 trillion in 2020 translating to a tax to GDP ratio of 6.1%. Total taxes collected include oil and non-oil tax plus taxes collected by states.
Nigeria has a nominal GDP of N145.6 trillion as at December 2019. This is according to data collated from the FG and States taxes for 2019.
Data was sourced from the 2019 Budget Implementation report and the 2019 IGR report published by the National Bureau of Statistics (NBS). To access the full dataset and all other index resources, visit https://resourcegovernanceindex.org.
Other Source of Income in Nigeria:
1. Licenses and Internal revenue
- Arms and ammunition licences fees
- Registration and licence fees e.g company registration, club registration fees, churches registration fees
- Court fees
- Passport fees
- Visa fees
- Advertisement fees (bill board)
2. Mining Revenue
Sources of revenue in Nigeria can be via mining activities such as:
- Royalties on mineral resources e.g tin, gold, limestone, etc.
- Quarrying licenses
- Mining fees
3. Federal Government Business Revenue
- Federal government investments
- Sales of government properties e.g land, building
- Proceeds from prison farms
- Interest and repayment of loans granted to state government and government workers.
- General loan interest.
4. Armed Forces Revenue
- Income from armed forces educational receipts
- Sales of small weapons
- Sales of armored tanks, aircraft
