Manufacturing Sector Delivers ₦329.6bn VAT Revenue In Q1 2026 Despite GDP Share Dip

June 15, () — Nigeria’s manufacturing sector generated ₦329.59 billion in Value Added Tax (VAT) revenue in the first quarter of 2026, reinforcing its position as one of the country’s most significant sources of non-oil tax revenue despite a marginal decline in its contribution to economic output.

Data released by the National Bureau of Statistics (NBS) showed that VAT collections from manufacturing activities rose significantly from ₦286.95 billion recorded in the corresponding period of 2025. The Q1 2026 performance also exceeded the sector’s quarterly VAT contributions throughout 2025, underscoring its resilience amid a challenging operating environment.

The development comes as Nigeria’s economy expanded by 3.89 percent year-on-year in the first quarter of 2026, with manufacturing accounting for 9.57 percent of real Gross Domestic Product (GDP).

VAT receipts from the sector have remained robust over the past five quarters, reflecting sustained production levels, consumer demand and growing formal sector activity. Manufacturing VAT collections stood at ₦286.95 billion in Q1 2025 before rising to ₦297.68 billion in Q2. Collections moderated slightly to ₦290.79 billion in Q3 and increased to ₦292.12 billion in Q4 2025. The latest Q1 2026 figure represents a 14.86 percent increase from the corresponding period last year.

Overall, the manufacturing sector contributed ₦1.17 trillion in VAT revenue in 2025, up sharply from ₦803.53 billion recorded in 2024, highlighting its growing importance to government revenue generation.

Despite the improvement in tax contributions, manufacturing’s share of real GDP slipped slightly to 9.57 percent in Q1 2026 from 9.62 percent in the same period of 2025. However, the figure marked a substantial recovery from the 7.4 percent recorded in the fourth quarter of 2025.

Analysts say rising VAT receipts could be linked to stronger consumer spending, improved tax compliance and increased formalisation of economic activities. However, manufacturers continue to grapple with high energy costs, foreign exchange pressures, infrastructure gaps and elevated borrowing costs, factors that could weigh on future growth prospects.