AfDB: Nigeria’s Revenue Base Weak Amid $2.3tn Infrastructure Development Need

Nigeria faces significant economic hurdles due to its weak domestic revenue base and persistently low productivity, according to the African Development Bank (AfDB). The continental lender warns that these constraints severely undermine the nation's capacity to finance development priorities and achieve sustained economic growth.

The AfDB's 2026 Country Focus Report highlights that Nigeria requires approximately $2.3 trillion in infrastructure investment by 2043 to reach a level that can support economic transformation. However, mobilizing such substantial funding is contingent upon a stronger revenue base, deeper financial markets, and more efficient use of capital.

Beyond financing availability, the report points to structural weaknesses that limit economic productivity. These include low agricultural output, weak manufacturing competitiveness, inadequate infrastructure, insecurity, skills shortages, and a labor force concentrated in low-productivity sectors. These factors collectively constrain economic output and reduce the returns on investments.

While Nigeria's debt burden is comparable to other African economies, its productivity indicators remain weak. The AfDB suggests that public borrowing has not been sufficiently directed towards investments that enhance productive capacity or accelerate structural transformation. The bank advocates for measuring the effectiveness of public borrowing by its ability to generate higher productivity, stimulate private sector investment, create jobs, and foster sustainable economic growth. The AfDB urged Nigeria to rationalize tax exemptions and reduce financial leakages to bolster its revenue mobilization efforts.