Beyond Tax Revenue: The Money Nigeria Refuses to Earn

By Ugo Inyama

Nigeria’s public finance debate resembles a household standing beside a flowing river, arguing endlessly about how to ration water while leaving buckets untouched at the riverbank. Several policymakers speak as though the well has run dry, when the taps are simply not connected. The problem is not scarcity per se, but neglect of some of the very wealth sources already under government control and poor management across many revenue streams. It is not the absence of value, but the failure to collect it.

Nigeria’s fiscal challenges are often framed around how to raise taxes, widen the tax net, or compel citizens to pay more. This framing obscures a deeper reality. Nigeria is not short of economic activity; it is short of converting that activity into reliable public revenue. The economy moves, trades, extracts, and consumes every day, yet too much of that value never reaches public accounts.

Looking Beyond Taxes

As citizens are now expected to contribute more in taxes under new tax laws and policies, government must also meet them halfway by demonstrating that it can earn responsibly from what already exists. A state that cannot account for what it already controls weakens its moral authority to demand more from its people. Before asking for a larger contribution, it is imperative to first show that existing revenue fields are being properly harvested.

Across oil production, ports and trade, power, and solid minerals, significant value is created daily. Much of it leaks away through weak systems, inconsistent enforcement, and poor measurement. This is not a problem of missing laws or policy ideas. Nigeria has no shortage of regulations, agencies, or statutory revenue rights. The problem lies in weak adherence to existing rules and limited accountability for outcomes.

The challenge is rarely a lack of authority. It is the failure to enforce rules consistently and track outcomes transparently. Revenue is too often treated as an expectation rather than as a system. Estimates replace measurement, and discretion substitutes for discipline. A sustainable fiscal strategy must therefore begin with a simple principle: strengthen existing earning mechanisms before expanding demands on households and businesses.

Measuring Accurately What Is Produced

Oil and gas remain central to Nigeria’s public finances, yet petroleum revenue outcomes are persistently uncertain. Crude theft, weak metering, opaque cost recovery, and inconsistent verification undermine confidence in reported figures. Oil revenue therefore functions less as a dependable anchor and more as a variable assumption in budget planning.

The remedy is measurement discipline. Production volumes must be accurately metered. Costs must be independently verified. Losses must be quantified rather than implied. When output is measured transparently and reported consistently, revenue becomes more predictable and fiscal planning improves, even in volatile markets. Without credible measurement, oil revenue will continue to appear on paper without fully materialising in public accounts.

Tracking What Is Traded

Nigeria’s ports handle large volumes of imports and exports, yet customs revenue does not fully reflect this activity. Manual processes, discretionary waivers, under-invoicing, and enforcement gaps weaken revenue capture. Congestion and inefficiencies that divert cargo to neighbouring ports also divert customs income.

Port reform is often framed as a logistics or competitiveness issue. It is equally a revenue issue. Automation, reduced discretion, and integrated data systems ensure that trade flows translate into public income. When trade is tracked properly, value stops slipping through administrative cracks.

Formalising What Exists

Nigeria’s solid minerals sector illustrates how value can exist without revenue. Informal extraction, weak royalty enforcement, and incomplete production data mean that significant activity remains outside the fiscal net.

Formalisation, not suppression, is the solution. Simplified licensing, improved monitoring, and credible production data can bring operators into the formal system without discouraging investment. When rules are clear and consistently applied, compliance improves and public returns follow.

Adherence and Accountability

Across sectors, the pattern is consistent. Policies exist, but adherence is uneven. Responsibilities are fragmented. Enforcement is selective. Data gaps obscure performance.

An adherence-based revenue framework closes this gap: measure what is produced, track what is traded, bill what is consumed, formalise what exists, and enforce rules consistently. Equally important is accountability to citizens. Publishing clear public dashboards showing what is produced, billed, collected, and remitted would rebuild confidence. When outcomes are visible, compliance becomes easier to sustain.

Fix the Pipes Before Digging New Wells

Dormant revenue has consequences. When earnings fall short, borrowing fills the gap. Debt servicing then crowds out spending on health, education, and infrastructure. Over time, public trust erodes as citizens question both competence and fairness.

Nigeria’s revenue challenge is not that the river has run dry. It is that the channels meant to carry value into public accounts are fractured, poorly monitored, and weakly enforced. Fiscal sustainability will not come from digging new wells while old leaks remain unattended. It will come from discipline: earning quietly, measuring honestly, enforcing consistently, and reporting transparently.

The money is not missing. It is simply being left on the table.

*Ugo Inyama writes from the African Digital Governance Centre, Manchester, UK
e: ugo@africandgc.org
w: www.africandgc.org