South-west remitted ₦341.38B but received only ₦99.85B

Key Takeaways

  • South-West drives Nigeria’s VAT but gets little back. The region remitted ₦341.38B (53%) but received only ₦99.85B (29% return).
  • South-South remitted ₦121.84B but got ₦52.49B (43% return); Rivers alone gave ₦90.21B but got just ₦11.01B.
  • The North enjoyed the highest VAT gains, remitting ₦66.18B and receiving ₦161.11B (240% return); the North-West got ₦66.75B from ₦28.31B (235% return).
  • South-East and North-East got the biggest VAT boost. South-East: ₦10.94B remitted, ₦39.13B received (357.6% return); North-East: ₦14.94B remitted, ₦46.68B received (312.5% return).

Nigeria's VAT system creates a deep financial imbalance across its regions. The South-West, despite remitting more than half of the nation’s VAT revenue (₦341.38B), receives only 29% of what it pays. Similarly, the South-South remitted significantly (₦121.84B), but most of it came from Rivers (₦90.21B), which barely got anything back.

Meanwhile, the three Northern zones collectively remitted ₦66.18B but received ₦161.11B, a staggering 240% return. This means that the North got back more than twice what it remitted, while the South-West and South-South are the biggest net losers.

Perhaps the most striking disparity is in the South-East, which remitted just ₦10.94B but received ₦39.13B, a return of over 357%. Similarly, the North-East enjoyed a 312% return, receiving ₦46.68B despite remitting just ₦14.94B.

This VAT redistribution formula favours lower-contributing regions while heavily taxing high-revenue states, raising critical questions about fairness and sustainability in Nigeria's revenue-sharing model.

Source:

Federal account allocation committee (FAAC)

Period:

January 2025
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