Economy
Nigeria remains Africa’s largest economy, says World Bank
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The World Bank’s Country Director for Nigeria, Dr. Ndiame Diop, has confirmed that Nigeria remains the largest economy in Africa by Gross Domestic Product (GDP) despite the challenges faced by its private sector.
Speaking at the Country Private Sector Diagnostic (CPSD) and Stakeholder Engagement in Abuja yesterday, Dr. Diop said while Nigeria receives far less Foreign Direct Investment (FDI) than its potential warrants—especially in comparison to countries like Indonesia and South Africa—it continues to hold its position as Africa’s biggest economy.
He stated that the CPSD report, set to be released in the coming weeks, will reveal the impact of private sector constraints on economic growth.
He noted that if targeted actions were taken to remove these obstacles, Nigeria’s economic potential would be significantly enhanced.
The current macroeconomic reforms, he explained, have created a favorable environment for such changes. He cited the country’s recent economic stabilization measures, particularly exchange rate market adjustments and improved access to foreign exchange, as critical steps that have already enhanced investment conditions.
Dr. Diop outlined four key sectors where strategic reforms could unlock massive investment and job creation. In the Information Communication Technology (ICT) sector, investment opportunities worth up to $4 billion could be realized, potentially creating more than 200,000 jobs.
In agribusiness, reforms could unlock $6 billion in investment and generate over 275,000 jobs.
The solar photovoltaic (PV) industry holds the potential for $8.5 billion in investment and more than 129,000 jobs, while the pharmaceutical sector could attract $1.6 billion and create more than 30,000 to 40,000 jobs.
For the ICT sector, he identified the high, unpredictable, and inconsistent right-of-way fees, levies, and informal charges—comprising 30 to 70 per cent of broadband rollout costs—as a major barrier. Addressing these regulatory inconsistencies, he argued, would be a game-changer for broadband expansion. He acknowledged that the National Economic Council has recognized this issue and that progress is being made through a World Bank-supported initiative.
Additionally, he pointed to challenges such as vandalism, limited financing for rural broadband expansion, and the need for competitive access to wholesale fiber. He noted that efforts are underway in collaboration with government agencies to resolve these issues, and the World Bank, the International Finance Corporation (IFC), and private investors are prepared to support broadband infrastructure development.
On solar power, Dr. Diop described Nigeria’s energy sector as difficult but noted that renewable energy access, particularly solar PV, has been a bright spot. He explained that private sector investment in renewable energy has historically been hindered by high costs and unviable tariffs. However, blended finance mechanisms supported by the World Bank and IFC have helped bridge this gap, making off-grid solutions more viable.
He pointed to the DES project, which aims to connect 17.5 million households and businesses to solar power, as evidence of growing private sector interest. While the solar industry is expanding, he stressed that reforms to improve Nigeria’s grid electricity supply remain crucial for industrialization.
The Regional Director for Central Africa and Anglophone West Africa at the IFC, Dr. Dahlia Khalifa, stressed the importance of consistency in regulatory policies, particularly in customs duties and revenue agency fees. She noted that unpredictability discourages private sector investment, as businesses rely on stable regulatory environments for strategic planning.
Khalifa also pointed out that while direct job creation in the pharmaceutical sector may be lower compared to other industries, improved healthcare services would yield far-reaching economic benefits.
Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, commended the IFC for its support across critical sectors, including agriculture, infrastructure, and pharmaceuticals. He highlighted key financing partnerships such as the $1.2 billion facility for Indorama’s fertilizer expansion in Eleme, investments in cocoa processing, and a $70 million SME financing initiative with First City Monument Bank.
He also acknowledged IFC’s latest commitment of $70 million to five Nigerian companies under the Distributive Access to Renewable Energy programme, part of the federal government’s broader Mission 300 initiative.
Edun said President Bola Tinubu’s administration has undertaken bold and necessary reforms that have reshaped Nigeria’s economic landscape. He noted that the removal of wasteful subsidies has strengthened government finances, while improved security has boosted oil production and revenue.
He highlighted that private sector confidence is growing, with new investments beginning to materialize in response to the government’s policy changes.
The minister restated the administration’s commitment to addressing the cost-of-living crisis, particularly through increased food production and affordability measures. He acknowledged that reforms such as the removal of fuel subsidies and the adoption of market-based pricing mechanisms have led to short-term inflationary pressures.
However, he assured that targeted interventions, including direct cash transfers to vulnerable citizens with World Bank support, will help mitigate the impact.
He insisted that the government remains determined to leverage technology to ensure swift, biometric-enabled assistance to those in need.
A total sum of N2.300 trillion, being the May 2026 Federation Account Revenue, has been shared between the federal government, states, and the local government councils.
In a statement on Wednesday by the spokesperson of the Office of the Accountant General of the Federation, Bawa Mokwa, the revenue was shared at the June 2026 Federation Account Allocation Committee FAAC meeting held in Abuja.
The N2.300 trillion total distributable revenue comprised distributable statutory revenue of N1.611 trillion and distributable Value Added Tax (VAT) revenue of N688.785 billion.
A communiqué issued by the Federation Account Allocation Committee (FAAC) indicated that the total gross revenue of N3.395 trillion was available in the month of May 2026. Total deduction for cost of collection was N123.546 billion, while total transfers and refunds were N971.610 billion.
According to the communiqué, gross statutory revenue of N2.651 trillion was received for the month of May 2026. This was higher than the sum of N2.378 trillion received in the preceding month by N273.623 billion.
Gross revenue of N743.668 billion was available from the Value Added Tax (VAT) in May 2026. This was lower than the N806.617 billion available in the month of April 2026 by N62.949 billion.
The communiqué stated that from the N2.300 trillion total distributable revenue, the federal government received a total sum of N818.680 billion, and the state governments received a total sum of N759.141 billion.
The local government council received N534.277 billion, while the sum of N188.132 billion (13% of mineral revenue) was shared with the benefiting state as derivation revenue.
On the N1.611 trillion distributable statutory revenue, the communiqué stated that the federal government received N749.801 billion and the state governments received N380.309 billion.
The local government councils received N293.202 billion, and the sum of N188.132 billion (13% of mineral revenue) was shared with the benefiting states as derivation revenue.
From the N688.785 billion distributable Value Added Tax (VAT) revenue, the federal government received N68.879 billion, the state governments received N378.832 billion, and the local government councils received N241.075 billion.
In May 2026, Companies Income Tax (CIT), CGT, SDT, Petroleum Profit Tax (PPT), Hydrocarbon Tax (HT), and Oil and Gas Royalty increased significantly, while Import Duty, Value Added Tax (VAT), Excise Duty, and CET Levies decreased considerably.
The Federal Government, states and local government councils shared a total sum of N2.257 trillion from the Federation Account in April.
Director, Press and Public Relations, Office of the Accountant General of the Federation, Bawa Mokwa, disclosed this in a statement on Monday.
The revenue was shared at the May 2026 Federation Account Allocation Committee, FAAC, meeting held in Abuja.
The N2.257 trillion total distributable revenue comprised distributable statutory revenue of N1.260 trillion , distributable Value Added Tax, VAT, revenue of N747.088 billion, and augmentation of N250.000 billion.
This indicated that total gross revenue of N3.184 trillion was available in the month of April 2026. The total deduction for cost of collection was N113.756 billion, while total transfers, refunds, and savings were N813.839 billion.
According to the statement, gross statutory revenue of N2.378 trillion was received for the month of April 2026. This was higher than the sum of N1.699 trillion received in the preceding month by N678.224 billion.
Gross revenue of N806.617 billion was available from VAT in April 2026. This was higher than the N664.425 billion available in the month of March 2026 by N142.192 billion.
The communiqué stated that from the N2.257 trillion total distributable revenue, the Federal Government received a total sum of N787.351 billion, and the state governments received a total sum of N772.360 billion.
The local government councils received N540.152 billion, while the sum of N157.254 billion (13% of mineral revenue) was shared with the benefiting states as derivation revenue.
On the N1.260 trillion distributable statutory revenue, the statement stated that the Federal Government received N580.942 billion and the state governments received N294.661 billion.
The local government councils received N227.172 billion, and the sum of N157.254 billion (13% of mineral revenue) was shared with the benefiting states as derivation revenue.
From the N747.088 billion distributable VAT revenue, the Federal Government received N74.709 billion, the state governments received N410.898 billion, and the local government councils received N261.481 billion.
The Federal Government received N131.700 billion of the N250.000 billion, the state governments received N66.800 billion, and the local governments received N51.500 billion.
In April 2026, Companies Income Tax, CIT, CGT, SDT, import duty, oil and gas royalty, and VAT increased significantly, while Petroleum Profit Tax, PPT, and hydrocarbon tax, HT, decreased considerably.
Excise duty and CET levies decreased marginally.
Nigeria’s company income tax, CIT, decreased in the first quarter of 2026 to N1.37 trillion.
The National Bureau of Statistics, NBS, disclosed this in its CIT report released on Monday.
The report showed that the country’s CIT dropped by 8.98 percent when compared to N1.449 trillion collected in Q4 2025.
Further breakdown showed that domestic CIT stood at N538.91 billion, while foreign payments accounted for N828.82 billion in the period under review.
“Company Income Tax (CIT) in Q1 2026 stood at N1.37 trillion, indicating a decrease of 8.08 percent on a quarter-on-quarter basis from N1.49 trillion in Q4 2025.
“Of the total CIT collected, domestic CIT contributed N538.91 billion, while foreign CIT payment accounted for N828.82 billion during the quarter,” the NBS stated.
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