Nigeria’s mining and quarrying sector is gradually strengthening its place within the nation’s economy, with new figures from the National Bureau of Statistics (NBS) showing that the industry generated N686.96 billion in Value Added Tax (VAT) in 2025. The figure marks a notable rise from the N556.19 billion recorded in 2024, reflecting improved tax compliance and stronger revenue mobilisation in a sector long considered underdeveloped despite Nigeria’s vast mineral wealth.
The quarterly breakdown reveals a fairly stable performance throughout the year. The sector recorded its highest VAT contribution in the first quarter at N187.59 billion, before easing to N164.70 billion in the second quarter. Contributions climbed slightly to N166.77 billion in the third quarter, while N167.90 billion was generated in the fourth quarter, highlighting consistent inflows during the latter half of the year even amid broader economic pressures.
Despite these gains, the mining industry still contributes less than five percent to Nigeria’s Gross Domestic Product (GDP). Persistent challenges including illegal mining activities, weak investment incentives, infrastructure limitations, and policy gaps have continued to restrict the sector’s full economic potential and reduce government revenue.
In response, the Federal Government has taken steps to strengthen fiscal oversight within the industry. In June 2025, four major tax reform laws were signed to modernise Nigeria’s tax system, including the Nigeria Tax Bill, Nigeria Tax Administration Bill, Nigeria Revenue Service (Establishment) Bill, and Joint Revenue Board (Establishment) Bill. A key reform transferred the collection of mineral royalties to the Nigeria Revenue Service (NRS) to improve accountability and reduce leakages. Early indicators of improved compliance emerged in Q1 2025, when the government generated N6.96 billion in mining fees.
The sector’s fiscal contribution also expanded beyond VAT. Reports indicate that Nigeria’s mining and quarrying industry generated N723.33 billion in Company Income Tax (CIT) in 2025, a sharp increase from N520.34 billion in 2024.
These developments occurred alongside broader VAT trends across the economy. Nigeria recorded N2.28 trillion in VAT revenue in the third quarter of 2025, representing a 10.66% increase from the N2.06 trillion posted in the second quarter. Collections later stood at N2.19 trillion in the fourth quarter, a 3.78% decline quarter-on-quarter but still a 12.84% year-on-year increase, with manufacturing remaining the largest contributor to VAT revenue in Q3 2025.
Together, the figures suggest that while Nigeria’s mining sector still faces structural hurdles, its fiscal footprint is gradually expanding. With stronger oversight, improved compliance, and sustained reforms, the country’s vast mineral resources could increasingly become a meaningful driver of revenue and economic diversification.
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