Nigeria’s rapid shift toward digital payments has delivered a major revenue boost to the Federal Government, helping it exceed its Electronic Money Transfer Levy (EMTL) target by ₦88.73 billion at the half-year point of the 2025 fiscal year. The strong performance underscores the growing importance of electronic transactions as a reliable non-oil revenue source amid persistent weakness in oil receipts.
The figures are contained in the Federal Government’s newly released 2025–2027 Medium Term Expenditure Framework (MTEF), published by the Budget Office of the Federation. The document shows that EMTL collections significantly outperformed expectations, helping to bolster non-oil revenue and partially offset the impact of underwhelming oil earnings.
What the data shows
Based on the EMTL’s full-year revenue projection of ₦230 billion, the Federal Government had expected to generate about ₦134.17 billion by mid-year 2025. Instead, actual collections surged to ₦222.90 billion, representing an outperformance of ₦88.73 billion or 66.1 percent above target.
This sharp rise reflects the increasing volume and value of electronic transactions carried out by Nigerians, as cashless payments continue to gain traction across households and businesses.
Overall, non-oil revenue performance during the period was mixed. Corporate Income Tax (CIT) collections came in at ₦5.86 trillion, slightly exceeding the prorated projection of ₦5.44 trillion. This represents a 7.6 percent overperformance, suggesting some resilience among corporate taxpayers despite broader economic challenges.
Value-Added Tax (VAT) delivered an even stronger showing. VAT receipts reached ₦4.82 trillion by mid-year, surpassing the half-year target by ₦439.22 billion, or roughly 10 percent. The performance reflects improved compliance, higher transaction volumes, and the spillover effects of increased digital payments.
However, despite the strong showing from EMTL, VAT, and CIT, net non-oil revenue told a less encouraging story. Including receipts from solid minerals, total non-oil revenue stood at ₦12.14 trillion by June 2025, falling short of projections by ₦1.81 trillion, a gap of about 13 percent. The shortfall highlights ongoing structural weaknesses in tax collection and subdued economic activity in segments outside the formal and digitally enabled economy.
Oil revenue remains a major drag
Oil and gas revenue performance continued to disappoint, placing additional strain on government finances. Gross oil and gas revenue for 2025 was projected at ₦51.04 trillion. By July 2025, however, only ₦11.17 trillion had been realised, compared with a prorated target of ₦29.78 trillion. This translates to a performance rate of just 37.5 percent.
The weak showing reflects a combination of factors, including lower-than-expected crude oil production, price volatility in global markets, and limited refining margins. After statutory deductions—such as the 13 percent derivation for oil-producing states and other first-line charges—net inflows into the Federation Account stood at ₦9.61 trillion. This was ₦15.78 trillion, or 62.2 percent, below the half-year target.
The magnitude of the oil revenue shortfall has intensified pressure on non-oil revenue streams, making the strong EMTL performance particularly significant for fiscal stability.
Why EMTL is outperforming
The 66.1 percent outperformance of the EMTL line reflects the deepening penetration of digital financial services across Nigeria’s economy. More Nigerians are relying on mobile banking, instant transfers, and electronic payment platforms for everyday transactions.
Data from the Nigeria Inter-Bank Settlement System (NIBSS) shows that Nigerians spent ₦284.9 trillion electronically in the first quarter of 2025 alone. This represents a 22 percent increase from the ₦234.4 trillion recorded in the same period of 2024.
The growth was driven largely by the NIBSS Instant Payment (NIP) platform, an account-number-based, real-time interbank payment solution launched in 2011. The NIP system facilitates transactions across multiple channels, including internet banking, mobile applications, USSD, point-of-sale terminals, and automated teller machines.
The bigger picture
The strong EMTL performance highlights the Federal Government’s growing reliance on digitally driven revenue sources as oil earnings continue to underperform. While electronic transactions are providing a much-needed cushion, analysts note that sustainable fiscal stability will require broader improvements in non-oil tax efficiency, economic diversification, and oil sector reforms to address persistent revenue leakages.
Emmanuel Bassey is a Financial Expert that has worked in the Banking and Finance Industry for over 15+ years across different banks in Nigeria
