Nigeria’s financial sector played a pivotal role in national revenue generation during the third quarter of 2024, contributing N570.91 billion in corporate income tax (CIT), a significant 21.5% share of the total N2.66 trillion collected during the period.
This insight is drawn from the recently released State of Enterprise (SOE) Report 2025, which provides a comprehensive review of economic indicators across key sectors.
According to the report, the financial sector’s performance, comprising banking, insurance, and other financial institutions, reflected strong earnings resilience in the face of economic headwinds, including double-digit inflation and sustained naira devaluation.
“The financial and insurance sector has not only weathered economic instability but emerged as the top CIT contributor, outperforming manufacturing,” the report noted.
Sectoral Shifts: Financial Services Overtake Manufacturing in CIT Contributions
The financial sector’s CIT contribution in Q3 2024 marks a 47.1% increase compared to N388.25 billion recorded during the same period in 2023.
The figure also representsa 39.25% increase when compared to N383.58 billion contributed in Q2 2024.
For the first time in recent years, the sector overtook manufacturing, which has historically led CIT contributions, as the top-performing source of company tax revenue.
The report attributes manufacturing’s relative decline to macroeconomic pressures, including sharp currency depreciation and rising production costs, which have led several multinational firms to exit the Nigerian market.
In contrast, currency devaluation benefited financial institutions, particularly commercial banks, as foreign exchange revaluation gains bolstered earnings. Combined with the introduction of a new windfall tax regime for banks, the financial sector’s tax burden is projected to rise further in subsequent quarters.
Additional Revenue from Banking VAT and Sector-Wide Performance
Beyond corporate income taxes, the financial sector also contributed significantly through value-added tax (VAT) remittances.
As of September 2024, financial services such as account maintenance, fund transfers, and digital banking transactions generated N223.69 billion in VAT revenue, representing 9.4% of total VAT collections and ranking the sector fifth nationally.
Given ongoing improvements in tax administration and digital compliance, the report projects that the sector’s VAT contributions could grow to N409.98 billion by year-end, reflecting a 90% increase over 2023 levels.
When viewed across all tax categories, the manufacturing sector still led in overall tax contributions, recording N1.07 trillion.
It was followed by:
- Mining and Quarrying – N834.63 billion
- Information and Communication – N830.12 billion
- Financial and Insurance Services – N794.60 billion
Despite being fourth in overall tax revenue, the financial sector’s rising share underlines its growing structural importance to the Nigerian economy.
What You Should Know
The report also noted that Nigeria’s banking sector posted significant growth in 2024, with total assets surging to N170.02 trillion, marking a 39.6% year-on-year increase from N121.8 trillion in 2023.
- According to the report, the financial services sector’s contribution to national output increased, with financial institutions generating N6 out of every N100 of Nigeria’s GDP in 2024, an uptick from N5 per N100 the previous year. This underlines the sector’s growing structural relevance and its expanding footprint in the broader economy.
- In terms of market activity, remittance inflows through banking channels saw a slight uptick from $19.55 billion in 2023 to $19.8 billion in 2024, as members of the Nigerian diaspora continued to support relatives and local businesses through formal money transfer services.
The rise of digital financial services was even more pronounced. Point-of-Sale (POS) transactions reached N18.15 trillion in 2024, up 69.6% from N10.7 trillion the previous year, signaling a consumer shift away from traditional banking halls and toward more accessible and tech-driven payment solutions.
