Nigeria’s manufacturing sector paid more VAT in 2024 even as output fell under inflation and FX pressure.
Figures from the National Bureau of Statistics (NBS) show that manufacturers remitted ₦803.53 billion in VAT in 2024, an increase of 38.93 percent compared with ₦578.39 billion in 2023.
This performance confirms the sector’s position as the single largest VAT contributor for the fourth consecutive year.
A breakdown of the data indicates that manufacturers paid ₦237.5 billion in Q4 2024, representing 25.89 percent of total VAT collections.
The third quarter accounted for ₦395.34 billion or 22.21 percent, while the second and first quarters contributed ₦183.89 billion and ₦177.17 billion, respectively.
Analysts observed that the increase in VAT collections was not driven by industrial expansion but by higher product prices and the devaluation of the naira. With inflation persistently above 20 percent and foreign exchange volatility pushing up the cost of raw materials, manufacturers were forced to adjust prices, resulting in higher VAT outflows.
The sector continues to face structural challenges including erratic power supply, rising fuel costs, and inadequate infrastructure. These factors have raised production and logistics expenses, squeezed margins, and reduced competitiveness.
In recent years, a number of local and multinational firms have scaled down or exited the market altogether, despite remaining large taxpayers.
Industry experts warn that unless reforms are introduced to stabilise the macroeconomic environment and reduce operating costs, the manufacturing sector will remain under pressure.
While VAT remittances are increasing, the figures mask deeper weaknesses in productivity, capacity utilisation, and investment inflows.