Sectorial Analysis of Value-Added Tax Contribution to Economic Growth of Nigeria

This study examines the sectorial contributions of Value-Added Tax (VAT) to Nigeria’s economic growth, with a focus on four key sectors: manufacturing, agriculture, mining and quarrying, and financial services. VAT has emerged as a significant fiscal tool for revenue mobilization, particularly as Nigeria seeks to diversify its economy beyond oil dependence. Using secondary data covering the period Q1 2015–Q4 2024, the study employs an ex-post facto research design and econometric analysis to assess the relationship between VAT revenues and Real Gross Domestic Product (RGDP). Findings reveal that VAT contributions vary across sectors, with manufacturing and financial services providing the largest shares, while agriculture and mining remain underutilized in terms of VAT mobilization. The results suggest that sectorial VAT contributions exert both direct and indirect effects on economic growth, though the magnitude differs by sector. Policy implications highlight the need to broaden Nigeria’s VAT base, strengthen compliance in underperforming sectors, and reinvest VAT revenues into productive activities to sustain long-term growth.