Non-Oil Revenue and Economic Growth in Nigeria

This study examined the relationship between non-oil revenue and economic growth in Nigeria, focusing on four key revenue streams: Value Added Tax (VAT), Company Income Tax (CIT), Educational Tax (EDT), and Licensing Fees (LF), with Real Gross Domestic Product (RGDP) serving as a proxy for economic growth from 2000 to 2024. A quantitative research design and a correlational approach were employed, and secondary data were collected from the Central Bank of Nigeria (CBN), Nigerian Bureau of Statistics (NBS), Federal Inland Revenue Service (FIRS), and the International Monetary Fund (IMF). Ordinary Least Squares (OLS) regression analysis was performed using E-Views 9.0, while diagnostic tests, including Variance Inflation Factor (VIF), Breusch-Pagan test, and Durbin-Watson statistic, were conducted to ensure the robustness of the model.The empirical results indicated that all non-oil revenue components had positive and statistically significant effects on RGDP. VAT showed a coefficient of 0.246 (p = 0.0264), suggesting that broad-based consumption taxation contributed to higher economic output. CIT demonstrated a coefficient of 0.413 (p = 0.0189), reflecting the significant role of corporate taxation of formal and profitable firms in supporting growth. EDT exhibited the largest coefficient of 0.751 (p = 0.0075), highlighting the importance of human capital development and the credible allocation of educational funds in driving RGDP. LF, with a coefficient of 0.026 (p = 0.0108), indicated its contribution to formal sector expansion, state capacity, and regulatory compliance. The findings supported both the Revenue Diversification Theory and Modernization Theory, showing that broadening non-oil revenue mobilization enhanced fiscal resilience and formal sector development. The study emphasized that efficient tax administration, strict compliance, and the adoption of digital systems were critical in leveraging non-oil revenue to achieve sustainable economic growth in Nigeria.