TAX REVENUE SUSTAINABILITY AND MACROECONOMIC STABILITY IN NIGERIA: A TIME-SERIES ANALYSIS (2000–2024)

Alli Noah; Esther Bidemi Popoola; Hepzibah Arhuere

doi:10.17261/Pressacademia.2026.2044

TAX REVENUE SUSTAINABILITY AND MACROECONOMIC STABILITY IN NIGERIA: A TIME-SERIES ANALYSIS (2000–2024)

Abstract

Purpose- This study examines whether more sustainable tax revenue translates into a more stable Nigerian economy, using annual data from 2000 to 2024. Methodology- Three dimensions of tax sustainability were tested against three macroeconomic outcomes: the tax-to-GDP ratio against output volatility, tax buoyancy against inflation, and non-oil tax composition against unemployment. The analysis draws on ARDL bounds testing, VECM, Johansen cointegration, and the Toda-Yamamoto causality test, with data sourced from the Central Bank of Nigeria, FIRS, and the National Bureau of Statistics. Findings- The results are consistent across all three models: a higher tax-to-GDP ratio reduces output volatility (β = −0.4231, p < 0.05), stronger tax buoyancy pulls inflation down (β = −2.176, p < 0.05), and a greater non-oil share in the tax mix lowers unemployment (β = −0.6814, p < 0.05). Error correction terms confirm that each relationship holds over the long run, and diagnostic tests clear the models on serial correlation, heteroskedasticity, normality, and structural stability. Conclusion- Nigeria's persistent output swings, inflation, and unemployment are not just economic problems, they are the predictable outcome of a tax system that has never been built to sustain them.

Keywords

References

Achanya, J. J., & Mamman, R. (2024). Tax revenue: A sustainable means of financing government spending in post COVID-19 Nigeria. Nigerian Journal of Management Sciences, 25(1), 168–179.
Adegbie, F. F., Olaniyan, O. E., Oluwagbade, O. I., & Awotomilusi, N. S. (2025). Fiscal tax revenue and sustainable infrastructural development in Nigeria: Aligning with UN Sustainable Development Goals 17 and 9. International Journal of Economics, Business and Management Research, 9(7), 179–196. https://doi.org/10.51505/IJEBMR.2025.9711
Adegbie, F. F., Salawu, R. O., & Ojutawo, I. R. (2020). Tax revenue volatility and economic growth in Nigeria. European Journal of Accounting, Auditing and Finance Research, 8(4), 65–88.
Adeyemi-Tijani, A. A. (2024). Fiscal policy, public debt, and macroeconomic stability in Nigeria. Faculty of Social Science, University of Lagos.
Agama, E. I., & Onowu, J. U. (2025). Tax revenue and macroeconomic performance in Nigeria. Journal of Management and Social Science Research, 9(2), 105–120.
Ajeigbe, K. B., Ganda, F., & Enowkenwa, R. O. (2024). Impact of sustainable tax revenue and expenditure on the achievement of sustainable development goals in some selected African countries. Environment, Development and Sustainability, 26, 26287–26311. https://doi.org/10.1007/s10668-023-03730-y
Aliyu, A. B., & Mustapha, A. A. (2020). Impact of tax revenue on economic growth in Nigeria (1981-2017). Bullion, 44(4), 5-20.
Amouzou, E. K., Dzoagbe, N. E. K., & Ayivi, W. (2019). Impact of macroeconomic and institutional factors on tax revenues: New evidence from Togo. International Journal of Economics, Commerce and Management, 7(12), 41–60.

Athanasios, A., Charalampos, K., & Eleni, K. (2022). Assessing the effectiveness of tax administration in macroeconomic stability: evidence from 26 European Countries. Economic Change and Restructuring, 55(4), 2237-2261.
Chamisa, M. G., & Sunde, T. (2025). The impact of macroeconomic and social variables on income and consumption tax revenues: a case of Zimbabwe. Cogent Economics & Finance, 13(1), 2506700.
Daniel, J., Davis, J., Fouad, M., & Van Rijckeghem, C. (2006). Fiscal adjustment for stability and growth. IMF Pamphlet Series No. 55. International Monetary Fund.
Dawodu, O. M., Agbetunde, L. A., Oyegoke, A. A., & Fadipe, A. O. (2025). Effect of taxation on environmental conservation in Nigeria. Journal of Emerging Trends in Economics and Management Sciences, 16(5), 205–213.
Değirmenci, T. (2024). A path towards sustainable development from fiscal instruments in Türkiye: The role of tax revenues and public expenditures. International Journal of Management Economics and Business, 20(3), 607–623. http://dx.doi.org/10.17130/ijmeb.1457832
Golpe, A. A., Sánchez-Fuentes, A. J., & Vides, J. C. (2023). Fiscal sustainability, monetary policy and economic growth in the Euro Area: In search of the ultimate causal path. Economic Analysis and Policy, 78, 1026–1045. https://doi.org/10.1016/j.eap.2023.04.038
International Monetary Fund. (2016). Tax policy, leverage and macroeconomic stability. IMF Staff Discussion Note, October 2016. International Monetary Fund.
International Monetary Fund. (2025). Economic diversification for sustainability in Oman. International Monetary Fund Working Paper.
Iorlaha, M., Agi, I. A., & Asema, T. (2024). Maximizing revenue generation through effective tax policies for sustainable economic development in Nigeria: A conceptual review. African Journal of Accounting and Financial Research, 7(1), 119–131. https://doi.org/10.52589/AJAFR-XJQQEGDR
Jalles, J. T. (2021). Tax capacity and growth in the Asia-Pacific region. Journal of the Asia Pacific Economy, 26(3), 527-551.
Johansen, S. (1988). Statistical analysis of cointegration vectors. Journal of Economic Dynamics and Control, 12(2–3), 231–254.
Juliannisa, I. A., Parianom, R., & Abrianto, A. (2023). Does GDP Affect Tax Revenue? EcceS: Economics Social and Development Studies, 10(1), 69-89.
Lyulyov, O., Lyeonov, S., Tiutiunyk, I., & Podgórska, J. (2021). The impact of tax gap on macroeconomic stability: Assessment using panel VEC approach. Journal of International Studies, 14(1), 139–152. https://doi.org/10.14254/2071-8330.2021/14-1/10
MacKinnon, J. G., Haug, A. A., & Michelis, L. (1999). Numerical distribution functions of likelihood ratio tests for cointegration. Journal of Applied Econometrics, 14(5), 563–577.
Mehdiyeva, L., & Gurbanova, T. (2025). The role of budgetary regulation in the management of macroeconomic processes and macroeconomic problems of increasing tax revenues of regions. Journal of Economics and Management Advances, 1(2), 8-20.
Meyliev, O. R., & Gofurova, K. (2023). Analysis of the influence of macroeconomic indicators on state budget tax revenue. Green Economy and Development, 2(3), 663413.
Monday, O., George, W. C., & Chukwu, G. J. (2022). Tax revenue buoyancy and human capital development in Nigeria: The case of direct taxation. International Journal of Multidisciplinary Research and Growth Evaluation, 3(1), 342-349.
Musgrave, R. A. (1969). Fiscal systems. Yale University Press.
Neupane, S. (2024). Macroeconomic determinants of tax revenue in Nepal (Doctoral dissertation).
Ngwoke, O. M. (2024). Effect of indirect taxation on economic sustainability in Nigeria 2002–2022. International Research Journal of Accounting, Finance and Banking, 15(8), 1–18. https://doi.org/10.5281/zenodo.13912076
Nwankpa, L. O., & Anaba, S. (2024). An evaluation of the contributions of tax revenue to sustainable economic growth in Nigeria. International Journal of Innovative Finance and Economics Research, 12(4), 53–62. https://doi.org/10.5281/zenodo.14056578
Olushola, O., Beyai, P. L., & Anagbado, A. (2024). Taxation and the challenge of fiscal sustainability in a resource-rich developing country: A re-evaluation of the Nigerian perspective. InTechOpen. https://doi.org/10.5772/intechopen.1007946
Oluwatobi, A. A., Adegbie, F., & Ogundajo, O. G. (2021). Tax revenue, capital formation, and economic growth in Nigeria. Research in World Economy, 12(1), 101–114. https://doi.org/10.5430/rwe.v12n1p101
Onwuchekwa, J. C., & Jerome, U. C. (2025). Macroeconomic determinants and tax revenue in Nigeria. UMM Journal of Accounting and Financial Management, 5(2), 55–72.
Osho, A. E., Olemija, T. L., & Falade, A. B. (2019). The influence of tax revenue on government capital expenditure and economic growth in Nigeria. European Journal of Business and Management, 11(2), 39–52. https://doi.org/10.7176/EJBM
Pamba, D. K. (2025). Macroeconomic factors and tax revenue performance in South Africa: A Markov-switching model approach. International Journal of Management, Accounting and Economics, 12(5), 716–740. https://doi.org/10.5281/zenodo.15622605
Pamba, D. K. (2025). Macroeconomic factors and tax revenue performance in South Africa: A Markov-Switching Model Approach. International Journal of Management, Accounting & Economics, 12(5), 243-255.
Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds testing approaches the analysis of level relationships. Journal of Applied Econometrics, 16(3), 289–326.
Reis, R. (2022). Debt revenue and the sustainability of public debt. Journal of Economic Perspectives, 36(4), 103–124. https://doi.org/10.1257/jep.36.4.103
Saibu, O. M. (2018). Public spending, fiscal sustainability and macroeconomic performance in Nigeria. NDIC Quarterly, 33(3 & 4), 33–48.
Samarah, W. A., & Talalweh, M. A. (2024). The impact of tax revenue on macroeconomic variables: A case study from Palestine. Qeios. https://doi.org/10.32388/DSTIR7
Sutherland, D., & Hoeller, P. (2014). Growth policies and macroeconomic stability. OECD Economic Policy Papers, No. 8. OECD Publishing.
Tafida, A., Adamu, P., Menson, A. E., Musa, A. B., Ikpe, O. K., & Bognet, A. C. (2024). Tax reforms, taxation and economic growth in Nigeria (1990–2022). KASU Journal of Economics and Development Studies, 10(2), 127–144.
Terefe, K. D., & Teera, J. (2018). Determinants of tax revenue in East African countries: An application of multivariate panel data cointegration analysis. Journal of Economics and International Finance, 10(11), 134-155.
Toda, H. Y., & Yamamoto, T. (1995). Statistical inference in vector autoregressions with possibly integrated processes. Journal of Econometrics, 66(1–2), 225–250.

Details

Primary Language

English

Subjects

Finance

Journal Section

Research Article

Authors

Alli Noah ^*
0000-0002-8311-9634
Nigeria

Esther Bidemi Popoola This is me
0009-0006-2665-897X
Nigeria

Hepzibah Arhuere This is me
0009-0008-7205-424X
Nigeria

Publication Date

June 30, 2026

Submission Date

March 23, 2026

Acceptance Date

June 1, 2026

Published in Issue

Year 2026 Volume: 13 Number: 1

DOI

https://doi.org/10.17261/Pressacademia.2026.2044

IZ

https://izlik.org/JA77MR34ES

Cite

RIS / Bibtex

APA

Noah, A., Popoola, E. B., & Arhuere, H. (2026). TAX REVENUE SUSTAINABILITY AND MACROECONOMIC STABILITY IN NIGERIA: A TIME-SERIES ANALYSIS (2000–2024). Journal of Economics Finance and Accounting, 13(1), 76-90. https://doi.org/10.17261/Pressacademia.2026.2044

AMA

1.Noah A, Popoola EB, Arhuere H. TAX REVENUE SUSTAINABILITY AND MACROECONOMIC STABILITY IN NIGERIA: A TIME-SERIES ANALYSIS (2000–2024). JEFA. 2026;13(1):76-90. doi:10.17261/Pressacademia.2026.2044

Chicago

Noah, Alli, Esther Bidemi Popoola, and Hepzibah Arhuere. 2026. “TAX REVENUE SUSTAINABILITY AND MACROECONOMIC STABILITY IN NIGERIA: A TIME-SERIES ANALYSIS (2000–2024)”. Journal of Economics Finance and Accounting 13 (1): 76-90. https://doi.org/10.17261/Pressacademia.2026.2044.

EndNote

Noah A, Popoola EB, Arhuere H (June 1, 2026) TAX REVENUE SUSTAINABILITY AND MACROECONOMIC STABILITY IN NIGERIA: A TIME-SERIES ANALYSIS (2000–2024). Journal of Economics Finance and Accounting 13 1 76–90.

IEEE

[1]A. Noah, E. B. Popoola, and H. Arhuere, “TAX REVENUE SUSTAINABILITY AND MACROECONOMIC STABILITY IN NIGERIA: A TIME-SERIES ANALYSIS (2000–2024)”, JEFA, vol. 13, no. 1, pp. 76–90, June 2026, doi: 10.17261/Pressacademia.2026.2044.

ISNAD

Noah, Alli - Popoola, Esther Bidemi - Arhuere, Hepzibah. “TAX REVENUE SUSTAINABILITY AND MACROECONOMIC STABILITY IN NIGERIA: A TIME-SERIES ANALYSIS (2000–2024)”. Journal of Economics Finance and Accounting 13/1 (June 1, 2026): 76-90. https://doi.org/10.17261/Pressacademia.2026.2044.

JAMA

1.Noah A, Popoola EB, Arhuere H. TAX REVENUE SUSTAINABILITY AND MACROECONOMIC STABILITY IN NIGERIA: A TIME-SERIES ANALYSIS (2000–2024). JEFA. 2026;13:76–90.

MLA

Noah, Alli, et al. “TAX REVENUE SUSTAINABILITY AND MACROECONOMIC STABILITY IN NIGERIA: A TIME-SERIES ANALYSIS (2000–2024)”. Journal of Economics Finance and Accounting, vol. 13, no. 1, June 2026, pp. 76-90, doi:10.17261/Pressacademia.2026.2044.

Vancouver

1.Alli Noah, Esther Bidemi Popoola, Hepzibah Arhuere. TAX REVENUE SUSTAINABILITY AND MACROECONOMIC STABILITY IN NIGERIA: A TIME-SERIES ANALYSIS (2000–2024). JEFA. 2026 Jun. 1;13(1):76-90. doi:10.17261/Pressacademia.2026.2044