Nigeria’s economy is projected to grow by 3.8 per cent in 2025, up from 3.4 per cent in 2024, driven by tax reforms and an expanding service sector, according to a report by Africa Sovereign Credit.
The report highlights stronger contributions from the services and industrial sectors, alongside a better capture of informal economic activities following the rebasing of the country’s Gross Domestic Product (GDP). Recent data from the National Bureau of Statistics (NBS) shows that Nigeria’s economy grew by 3.84 per cent in real terms in Q4 2024, surpassing the 3.46 per cent recorded in Q4 2023. The services sector was the key driver, expanding by 5.37 per cent and accounting for 57.38 per cent of total GDP.
Nigeria’s current account surplus is also expected to improve significantly, rising to 5 per cent of GDP in 2025, compared to an estimated 1 per cent in 2024, due to a projected surge in trade surplus. At the same time, the country’s fiscal deficit is forecasted to narrow from 5.2 per cent of GDP in 2024 to 4.3 per cent in 2025, with further reductions possible if key tax reform bills are successfully implemented.
The proposed reforms include the Nigeria Tax Bill, Nigeria Tax Administration Bill, Nigeria Revenue Service (Establishment) Bill, and Joint Revenue Board (Establishment) Bill. If passed, these laws are expected to create a fairer tax system, enhance collection efficiency, and increase government revenue.
Deliberations on these reforms gained momentum in February when the senate held a two-day public hearing at the National Assembly, bringing together key stakeholders, including finance minister, Wale Edun, FIRS chairman Zacch Adedeji, NNPCL Group CEO, Mele Kyari, and other government officials. The bills, submitted by President Bola Tinubu, have undergone five months of consultations and have now reached the second reading in the House of Representatives.
Legislators emphasised the need to harmonise tax administration, eliminate multiple taxation, and establish a structured framework for resolving tax disputes. The bills also propose creating an ombudsman system to handle tax-related conflicts between the government and taxpayers.
If implemented successfully, these reforms are expected to strengthen economic growth, improve Nigeria’s fiscal outlook, and create a more sustainable revenue framework for the country.
Monday, March 17, 2025
