Nigeria is No Longer as Dependent on Oil as It Used to Be – Report

Federal income and foreign exchange earnings were primarily dependent on oil exports, leaving the country vulnerable to global price fluctuations and external shocks.

Investors and experts kept a tight eye on this weakness, knowing that any disruption in the oil market might have far-reaching consequences for the economy.

Even throughout periods of relative success from the early 2000s to the mid-2010s, this structural vulnerability remained hidden, eventually showing itself with long-term ramifications for the state and its inhabitants.

These points were highlighted in a report by Quartus Economics, titled Nigeria Unshackled: Inside the Rise of a Fiscal State, which shows that the dependence on oil has dramatically changed.

The report notes that in recent years, a notable shift has taken place, as the West African country has gradually reduced its dependence on oil revenues, moving toward a more diversified fiscal structure.

Nigeria’s non-oil revenue figures for the last decade

A decade ago, oil contributed roughly three-quarters of total government revenue.

Oil and gas industry in Nigeria [Oil&GasFreeZone] Pulse Nigeria

Today, that share has dropped significantly to about one-quarter, based on fiscal data from 2023 and 2024.

Per the report, the actual transformation is the increase in non-oil and tax revenues.

Tax revenues used to account for less than half of government earnings, but it now accounts for up to 87% of total federation revenue.

Non-oil sources have also grown dominant in tax collections, accounting for more than 70%.

“Non-oil revenue grew from 25% in 2010 to nearly 75% of revenues by 2024,” the report states.

“From 44.5% in 2014, non-oil taxes now account for nearly three-quarters (75.9%) of federally collected taxes, as the contribution of oil taxes dropped from nearly 55% in 2015 to less than a quarter in 2025,” it adds.

This represents a fundamental rebalancing of Nigeria’s revenue model, indicating progress toward a more stable and predictable fiscal situation.

“Between 2015 and 2019, the country earned 41% less from oil than it had earned in the prior 5 years (2010-2014). While non-oil revenues grew 39%% during 2015 to 2019 (versus 2010 to 2014 total, the net effect was a 20% drop in total federation revenues during the second half of a decade of mixed fortunes,” the report states.

“During the last three years (2023 – 2025), Nigeria earned ₦62.3 trillion in taxes alone, of which the oil sector contributed just 27% of total taxes, while the non-oil sector accounted for over 73% (₦45.48 trillion).

In 2025, tax collection grew by 30%, also driven primarily by non-oil taxes, which accounted for nearly 84% of the growth in federally collected taxes.

Within 3 years, Nigeria’s tax revenue nearly tripled from ₦10.18 trillion in 2022 to ₦28.29 trillion in 2025.”

However, this growth is not without its hurdles.

Nigeria’s challenges with debt

Over the last decade, the country’s debt-to-GDP ratio has more than tripled, prompting concerns about fiscal sustainability.

“Public debt to GDP rose from 11.42% in 2012/13 to 34.9% in 2023/24 while debt service to revenue rose from 6% in 2012/13 to 38.5% in 2023/24,” the report states.

Although inflation has fallen to approximately 15% from a high of 30% in 2024, borrowing rates remain high, limiting the economy’s ability to drive growth and investment.