Tax Revenue and Foreign Financial Inflows as Determinants of Economic Growth in Nigeria: Evidence From 1980–2025

Peter-Israel; L. I.; Nwadighoha; C.E.; Okafor; M.C.; Alpheaus; O.E

doi:10.56201/jafm.vol.12.no10.2026.p567.585

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Tax Revenue and Foreign Financial Inflows as Determinants of Economic Growth in Nigeria: Evidence From 1980–2025

Peter-Israel, L. I., Nwadighoha, C.E., Okafor, M.C., Alpheaus, O.E,

Abstract

This study examined the effect of tax revenue and foreign financial inflows on economic growth in Nigeria over the period 1980–2025. Specifically, it investigated the effects of total tax revenue, foreign remittances, official development assistance and foreign direct investment on real gross domestic product . The study adopted an ex-post facto research design and utilised annual secondary time-series data covering 46 observations. Data were sourced from the Central Bank of Nigeria, Nigerian Revenue Service, World Bank’s World Development Indicators and the Organization for Economic Co-operation and Development. Descriptive statistics, correlation analysis and the Augmented Dickey–Fuller unit root test were employed for preliminary analysis, while ordinary least squares regression was used for estimation. The regression results revealed that total tax revenue had a positive but statistically insignificant effect on RGDP (β = 0.114136, p = 0.2097). Conversely, foreign remittances (β = 0.310026, p = 0.0003), ODA (β = 0.168788, p = 0.0238) and FDI (β = 0.203200, p = 0.0203) had positive and statistically significant effects on RGDP. The model explained approximately 85.29% of the variation in economic output and was statistically significant overall (F = 59.43982, p < 0.001). The study concludes that foreign financial inflows were significant contributors to Nigeria’s economic growth during the period examined, whereas tax revenue did not demonstrate an independent statistically significant effect. It recommends improved tax administration, productive utilisation of public revenue, effective management of development assistance and policies that encourage remittance investment and sustainable foreign direct investment.

Keywords

Tax revenueforeign remittancesofficial development assistanceforeign direct investmenteconomic growthNigeria.

References

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Tax Revenue and Foreign Financial Inflows as Determinants of Economic Growth in Nigeria: Evidence From 1980–2025

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