Nigeria's manufacturing industry has solidified its position as the primary driver of Value Added Tax (VAT) revenue for the nation, contributing a substantial N584.63 billion in the first six months of 2025. This data, released by the National Bureau of Statistics (NBS), highlights the sector's resilience amidst a challenging economic landscape.
NBS Data Reveals Sectoral Contributions
The latest figures from the statistics bureau show that total local VAT collections for the period from January to June 2025 reached N2.197 trillion. The manufacturing sector's contribution of N584.63 billion represents a significant 26.6% of this total, maintaining its lead from previous quarters.
Following manufacturing, the information and communication sector, along with mining and quarrying, were the other top contributors to the VAT pool. This ranking remained consistent across both the first and second quarters of the year, indicating stable revenue performance from these key industries.
A Quarter-by-Quarter Breakdown
A detailed review of the NBS report provides clearer insight into the quarterly flows. In Q1 2025, total VAT collections stood at N2.061 trillion. From this, local payments accounted for N1.102 trillion, foreign VAT brought in N454.76 billion, and import-related VAT contributed N507.00 billion. The manufacturing sector alone provided N286.95 billion, or 26.03%, of the local VAT in that quarter.
The trend continued into Q2 2025, with overall VAT revenue at N2.059 trillion. Local payments were N1.095 trillion, while foreign and import VAT added N459.95 billion and N508.55 billion respectively. Manufacturing's share grew to N297.68 billion, constituting 27.19% of the local VAT for the quarter.
Resilience Amidst Economic Headwinds
The sustained performance of the manufacturing sector is particularly notable given the array of pressures it faces. Industry operators continue to grapple with high inflation, exchange rate volatility, persistent power supply issues, and weak consumer demand. Despite these constraints, the sector's output has remained a cornerstone of formal economic activity and a reliable source of tax revenue for the government.
The NBS report underscores the sector's central role in Nigeria's economic development. This sentiment has been echoed by policymakers. Recently, the Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, pointed to emerging dividends from the nation's economic reforms, citing declining inflation and a more stable foreign exchange market.
Cardoso stated that the foundation for a revitalised economy is being laid, emphasizing a continued path of disciplined policy, credible institutions, and a commitment to stability. This macroeconomic context is crucial for the manufacturing sector's long-term growth and its ability to sustain its tax contribution.
The VAT revenue data coincides with other positive economic indicators. The NBS also reported that Nigeria's Gross Domestic Product (GDP) growth rate reached a four-year high in the second quarter of 2025, driven largely by a sharp rebound in the oil sector. While distinct, these parallel trends in VAT collection and GDP growth suggest multifaceted economic momentum.
The consistent lead of the manufacturing, information and communication, and mining sectors in VAT generation points to their formalised structures and scale of transactions. It also highlights the critical importance of fostering an enabling environment for these industries to thrive, as their health directly impacts government revenue and, by extension, public service funding.
